IT exports in 4MFY24

The country’s IT sector exports witnessed a growth of 16 percent month-on-month in October, touching $238 million. The rise in month-on-month IT exports was a respite after a decline witnessed in September over August.

Segment-wise, the growth on a month-on-month basis was led by the Telecom and Information Service exports that grew by 49 percent, and 50 percent, respectively. However, in absolute terms, Computer Services have the highest share in total IT export value and this segment witnessed a growth of 9 percent month-on-month. Within the Computer Services, Software Consultancy increased by 35 percent month-on-month.

A very often quoted reason for the month-on-month growth in remittances in the last few months has been the number of working days in the month, and the realization per day. On October 23, the MoM growth was due to a combination of a higher number of working days compared to Sep-23, and higher realization per day.

The growth in the tech sector exports was also witnessed on a year-on-year basis this time, which stood at 8 percent for October. IT export for Oct-23 increased primarily due to the improvement witnessed in the export of Software Consultancy and Computer Services which were up by 11 and 19 percent year-on-year, respectively. Overall, IT sector exports in 4MFY24 increased by 4 percent year-on-year.

The growth in the IT sector is definitely needed, but will the country achieve the ambitious targets of the government set for the year is another question. Initially, the (caretaker) government had announced that the country’s IT exports would grow to $15-20 billion in the next three years. And recently the caretaker minister for Information Technology and Telecommunications unveiled Pakistan’s inaugural IT Export Strategy (ITeS)that aims to boost IT exports to $10-$18 billion by 2028. Also, the central bank has announced an increase in the permissible retention limit from 35 to 50 in the Exporters’ Specialized Foreign Currency Account to attract offshore-parked foreign currency from IT firms. While this will help increase IT exports in the coming times, the growth in Annual IT exports from the current $2.5 billion will require not only structural and regulatory relief and incentives but also stability in the economic and political climate to revive business and investor confidence in the country.