IT exports on a rise

IT exports have been growing consecutively over the past four months. As per the latest data, the IT exports for December stood at $303 million, up by 17 percent month-on-month, and 23 percent year-on-year. Not only that, the IT exports for December were the highest ever monthly exports. As per the data by the State Bank of Pakistan, the IT export for the first half of FY24 (1HFY24) stood at $1.46 million, depicting a growth of 9 percent year-on-year.

Segment-wise, the growth on a month-on-month as well as year-on-year basis in Dec-23 was led by the Telecommunication Services that has previously been witnessing a lull. Computer Services, and primarily computer software and other services – the biggest contributor to IT exports also continued to show growth in exports. The segment witnessed a growth of 12 percent month-on-month and 20 percent year-on-year.The export mix of Telecom versus Computer Services changed slightly from 19 percent versus 81 percent respectively in Dec-23, to 21 and 79 percent in Dec-23. Overall, the IT exports for 1HFY24 saw a rise in share in total service exports to 39 percent from 34 percent in 1HFY23.

As highlighted previously in this space and also by the market, IT export in the country picked up during the period primarily due to the relatively stable currency and the relaxation in the permissible retention limit in the foreign currency accounts for the exporters’ Specialized Foreign Currency Accountsby the SBP from 35 percent to 50 percent. The experts believe that exports at the current rate could total somewhere between $3-3.5 billion. And if the estimated figure of at least $1 billion parked abroad by the IT companies is brought back, it is estimated that the total could come close to $5 billion mark. Efforts like bringing PayPal to Pakistan as announced by the interim IT Minister could help in brining that home.