Pakistan recorded monthly IT exports of US$ 298 million, up by 27 percent YoY and by 4 percent MoM in August 2024. These monthly IT exports in August 2024 are higher than the last 12-month average of US$ 275 million.
According to Topline Securities, the YoY jump in IT exports is due to IT export companies growing client base globally, especially in GCC region, relaxation in the permissible retention limit by the State Bank of Pakistan, increasing it from 35 percent to 50 percent in the Exporters’ Specialized Foreign Currency Accounts, and stability in PKR encouraging IT exporters to bring a higher portion of profits back to Pakistan.
MoM increase in IT exports is due to a higher number of working days in August (21) compared to July (20). Export proceeds per day were recorded at US$ 14.2 million for August vs. US$ 14.3 million in July.
Pakistani IT companies are active in engaging with global clients. Recently leading IT companies of Pakistan attended London Tech Week 2024, Collision Canada 2024, and Black Hat, USA.
According to the Pakistan Software Houses Association (P@SHA) survey 62 percent of IT companies are maintaining specialized foreign currency accounts.
A major development on July 24 was SBP adding a new category of Equity Investment Abroad (EIA), specifically for export-oriented IT companies. I exporters can now acquire interest (shareholding) in entities abroad utilizing up to 50% proceeds from specialized foreign currency accounts. This development will further boost the confidence of IT exporters to remit proceeds back to Pakistan.
Net IT Exports (Exports Imports) displayed a monthly number of US$ 257 million and increased by 26 percent YoY in August 2024. These net IT export numbers in August 2024 are also higher than the last 12-month average of US$ 241 million.
The brokerage house says the IT sector will continue its growth trajectory and momentum with likely growth of 10- 15 percent for FY25 to US$ 3.5-3.7 billion.
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The increase in IT exports isn’t a real surge; it’s due to IT firms repatriating foreign currency holdings from abroad, creating the impression of growth. How can the government claim this as an achievement when it has made zero contributions to freelancers, and the services provided by the IT sector operate independently without any government support?