September 2024 Sees 42% Spike in IT Exports

ISLAMABAD: In September 2024, Pakistan’s IT exports reached US$292 million, a 42% year-over-year increase. This growth also signifies the 12th consecutive month of rising IT exports, highlighting the sector’s continued momentum and success. Additionally, this is a huge improvement for the country’s tech industry. This data shows that the industry has continued momentum, surpassing the 12-month average of US$280 million, despite a 2% fall from August 2024.

Topline Pakistan Research reports that overall IT exports for the first quarter of FY25 reached US$877 million, representing a 34% year-on-year increase. One reason for the dramatic increase in exports is the recent policy shift at the State Bank of Pakistan, which doubled the allowed retention limit in Exporters’ Specialised Foreign Currency Accounts from 35% to 50%. Another reason is the growing number of international clients, especially in the GCC region. Because of this change, IT firms are sending more of their earnings back to Pakistan.

With 20 working days in September instead of 21, experts predict that export proceeds of $14.6 million per day, up from $14.2 million in August, will offset the month-on-month fall.

Pakistani IT companies are participating in major events like Collision Canada 2024 and London Tech Week 2024 to build relationships worldwide. According to a poll by the Pakistan Software Houses Association (P@SHA), 62% of IT companies are using specialized foreign currency accounts to make overseas transactions even easier.

SBP Policy boosts IT Exports with 56% YoY growth in September 2024

Importantly, this fiscal year the SBP established a new category called Equity Investment Abroad (EIA). This category permits export-oriented IT companies to deposit up to 50% of the funds from their specialized foreign currency accounts into foreign entities. It is believed that this approach will increase remittances to Pakistan by reassuring IT exporters.

September 2024’s net exports of information technology were $255 million, up 56% year-on-year and higher than the $245 million average for the previous 12 months.

Experts in the field predict that the IT sector will continue to grow in the years to come, with a 10-15% increase predicted for FY25, with a potential value of US$3.5-3.7 billion. Systems Limited (SYS) is one of the companies spearheading this expansion, and it’s a great investment pick with a PE of 14x in 2024 and 10x in 2025.