IT exports hit 12-month high in November on easing of forex rules

KARACHI: Pakistan's information technology (IT) exports rose by nine percent month-on-month to $259 million in November 2023, the highest level in the past 12 months, a brokerage house reported on Thursday .

The increase was mainly driven by a relaxation in the permissible retention limit by the State Bank of Pakistan (SBP), which allowed IT exporters to keep 50 percent of their foreign earnings in their specialized accounts, up from 35 percent previously, brokerage Topline Securties said.

A stable rupee also encouraged IT companies to repatriate their foreign income and deposit it in local accounts. The IT minister previously said that IT companies had parked an estimated $1-2 billion outside of Pakistan, which could be brought back to boost the country's foreign exchange reserves.

The IT export figure reflects the amount remitted back to Pakistan by technology companies, which provide services such as software development, web design, data processing, and call centers to clients around the world.

Computer services, which accounted for 83 percent of the total IT exports in November 2023, grew by 14 percent month-on-month and 20 percent year-on-year, while telecom services, which made up 17 percent, declined by 11 percent month-on-month.

Other computer services, such as consulting, training, and maintenance, recorded the highest growth rate of 28 percent month-on-month, followed by export of computer software, which increased by 14 percent month-on-month.

In the first five months of the fiscal year 2023-24 (July-November), IT exports rose by six percent year-on-year to $1.2 billion, representing 7.4 percent of the total exports of the country. Net IT exports, which deduct IT imports from IT exports, also increased by 11 percent month-on-month and seven percent year-on-year to $226 million in November 2023.

On a trailing 12-month basis, net IT exports reached $2.4 billion, up by 10 percent year-on-year.

The IT sector is expected to benefit from the global and regional trends of increasing spending on software and IT services, as per a report by Gartner Inc., a technology research and consulting firm.

Gartner projected that worldwide spending on software would grow by 13.8 percent

and spending on IT services would increase by 10.4 percent in 2024.

MENA (Middle East and North Africa) software spending was forecast to record double-digit growth of 12.3 percent in 2024, followed by IT services spending growing at 11.1 percent next year, to accelerate digitalization and automation in the region.