Pakistan’s technology sector achieved its highest-ever monthly IT exports of $348 million in December 2024, reflecting a 15% year-on-year (YoY) increase and a 12% rise compared to November 2024. This figure also surpasses the 12-month average of $299 million, marking the 15th consecutive month of YoY growth in IT exports since October 2023.

For the first half of FY25 (1HFY25), IT exports totaled $1.86 billion, representing a robust 28% YoY growth. Export proceeds per day in December 2024 were recorded at $16.6 million, up from $14.8 million in November 2024.

Key Drivers of Growth
The significant YoY growth in IT exports is attributed to several factors:

1. Global Expansion: Pakistani IT companies have expanded their client base, particularly in the GCC region.
2. Policy Reforms: The State Bank of Pakistan (SBP) increased the permissible retention limit for IT exporters from 35% to 50% in Exporters’ Specialized Foreign Currency Accounts.
3. Equity Investment Abroad: IT exporters can now invest in foreign entities using up to 50% of their proceeds, boosting confidence in the sector.
4. PKR Stability: A stable Pakistani Rupee has encouraged IT exporters to remit a higher portion of their profits back to Pakistan.

Pakistani IT companies have also been actively engaging with global clients. Notable events such as the Oslo Innovation Week 2024 and the Pak-US Tech Investment Conference have provided opportunities to showcase the country’s IT capabilities.

Sector Developments and SBP Reforms
A major development in FY25 was the introduction of a new category by the SBP, Equity Investment Abroad (EIA), specifically for export-oriented IT companies. This allows IT exporters to acquire shareholding in foreign entities using proceeds from their specialized foreign currency accounts. According to a survey by the Pakistan Software Houses Association (P@SHA), 62% of IT companies are now maintaining these accounts, further boosting confidence in the sector.

Despite the record monthly exports, net IT exports (exports minus imports) in December 2024 were recorded at $222 million, a 16% YoY decline and below the 12-month average of $265 million. This indicates rising imports in the IT sector, which could be linked to increased investments in technology and infrastructure.

Future Outlook
The IT sector is expected to maintain its growth trajectory, with projected growth of 10-15% for FY25, taking total IT exports to $3.5-3.7 billion. Under the government’s ‘Uraan Pakistan’ national economic plan, a target of $10 billion in IT exports has been set for FY29, requiring a compound annual growth rate (CAGR) of 28% over the next five years.