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Thursday February 29, 2024

IT exports jump 16pc in October on software, telecom demand

By Our Correspondent
November 23, 2023
At the global level, Pakistan is host to the third-largest number of freelancers working on the most popular web platforms for contractual jobs. — AFP File
At the global level, Pakistan is host to the third-largest number of freelancers working on the most popular web platforms for contractual jobs. — AFP File

KARACHI: Pakistan's information technology (IT) exports rose 16 percent month-on-month to $238 million in October, driven by strong growth in software consultancy, telecom and other computer services, a brokerage house said on Wednesday.

The IT export inflows in October were also higher than the last 12-month average of $219 million, brokerage Topline Securities said. The brokerage attributed the increase in IT exports to a combination of higher number of working days compared to September and higher realisation per day.

Product-wise, software consultancy exports increased by 35 percent month-on-month to $74 million and telecom services exports jumped 90 percent to $29 million in October. Services exports, excluding IT, remained flat at $418 million in October.

On a year-on-year basis, IT exports for October increased by 8 percent due to remarkable performance in the export of software consultancy, up 11 percent, and other computer services, up 19 percent.

In the first four months of the fiscal year 2023/24 (July-June), IT exports increased by 4.4 percent year-on-year to $893 million. The reported IT export number indicates the amount remitted back to Pakistan by tech companies. According to the IT minister, IT companies have parked around $1-2 billion outside Pakistan due to declining business confidence and volatility in exchange rate.

In order to attract offshore-parked foreign currency from IT firms, the central bank announced in October an increase in the permissible retention limit from 35 percent to 50 percent in the exporters' specialized foreign currency accounts, which the brokerage said would contribute to an increase in IT exports in the coming months.

Net IT exports, which deduct IT imports from IT exports, increased by 25 percent month-on-month and 21percent year-on-year to $205 million in October. In the first four months of the fiscal year, net IT exports recorded a growth of 5 percent year-on-year to $763 million, the report said.

Net IT exports on a trailing 12-month basis as of October also grew by 12 percent year-on-year to $2.3 billion. In the first four months of the fiscal year, gross IT exports as a percentage of total exports was 7.4 percent, compared to 7.2 percent in the same period last year. The export mix of telecom and computer services for October was 21/79 percent, respectively, compared to 22/78 percent in October last year. In the first four months of the fiscal year, the export mix was 19/81 percent, compared to 20/80 percent in the same period last year.