IT exports surge 62 percent y/y to record $310 million in April

Our Correspondent
Saturday, May 18, 2024

KARACHI: Pakistan's information technology (IT) exports jumped by 62 percent year-on-year to a record $310 million in April, driven by growth in the Gulf region and the relaxation of foreign currency retention limits.

The monthly IT exports also rose by 1 percent from March, which was the previous highest at $306 million. "This is the highest ever export number in a single month, with the previous highest being $306 million in March 2024," brokerage Topline Securities said in a note. "These monthly IT exports in April are higher than the last 12-month average of $245 million."

The brokerage said the year-on-year jump in IT exports is due to IT export companies growing in the GCC region, especially Saudi Arabia, the relaxation of 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 the stability of the rupee encouraging IT exporters to bring a higher portion of profits back to Pakistan.

In 10MFY24, IT exports clocked in at $2.59 billion, up by 21 percent year-on-year compared to $2.14 billion recorded in 10MFY23.Net IT Exports (Exports-Imports) also displayed the highest ever monthly number of $283 million and increased by 68 percent year-on-year in April 2024. These net IT exports numbers in April are also higher than the last 12-month average of $214 million. In 10MFY24, net IT exports recorded a growth of 20 percent year-on-year to $2.28 billion.

The higher retention facility of 50 percent was introduced by the caretaker government of Pakistan. At that time, the then caretaker IT minister had stated that this facility would boost IT exports by $1.0 billion on top of $2.6 billion recorded in FY23."However, this target of $3.5-3.6 billion is not likely to be achieved in FY24, with IT exports set to close in the region of $3.1-3.2 billion," the brokerage said.