IT exports decline marginally in May; 11MFY25 still posts 19% growth

KARACHI: The IT export sector recorded a slight year-on-year (YoY) decline of 1.0 per cent in May 2025, with exports standing at $329 million. However, the figure represents a 4.0 per cent month-on-month (MoM) increase and remains higher than the 12-month average of $314 million, according to data released by the State Bank of Pakistan on Tuesday.

This is the first YoY decline in IT exports after 19 consecutive months of growth. Export proceeds averaged $16.5 million per day in May, compared to $15.9 million in April.Cumulatively, IT exports for the first 11 months of the fiscal year 2025 (11MFY25) reached approximately $3.5 billion, reflecting a 19 per cent increase compared to the same period last year.

Commenting on the trend, Nasheed Malik, analyst at Topline Research, attributed the growth in 11MFY25 exports to multiple supportive developments. “The surge is driven by expansion in global client bases, especially in the Gulf Cooperation Council (GCC) region, relaxation in the permissible retention limit by the State Bank of Pakistan (SBP) from 35 to 50 per cent in Exporters’ Specialised Foreign Currency Accounts, permission to make equity investments abroad, and the relative stability in the Pakistani rupee, which has encouraged exporters to repatriate a greater share of profits,” Malik explained.

In a bid to capture further international business, Pakistani IT companies have been actively participating in global events. Notably, several leading firms attended LEAP 2025 in Saudi Arabia and Web Summit Qatar 2025, making a strong case for Pakistan’s digital capabilities on the global stage.

The Pakistan Software Houses Association (P@SHA) highlighted in a recent survey that 62 per cent of IT companies are utilising specialised foreign currency accounts, a sign of growing confidence in official policy measures.

A significant policy initiative in FY25 was the SBP’s introduction of a new category, Equity Investment Abroad (EIA), tailored specifically for export-oriented IT firms. This allows companies to acquire equity in overseas entities using up to 50 per cent of the funds held in their foreign currency accounts. The move is expected to further bolster confidence among exporters and stimulate inflows.

Net IT exports (exports minus imports) stood at $294 million for May 2025, reflecting a 1.0 per cent YoY increase and a 2.0 per cent rise over April. This also surpassed the 12-month average net export figure of $272 million.

Industry sources suggest that full-year FY25 exports are expected to close at around $3.8 billion, marking a 17 per cent increase over FY24. Under the government’s economic vision, branded as the ‘Uraan Pakistan’ plan, authorities have set an ambitious IT export target of $10 billion by FY29, requiring a compound annual growth rate (CAGR) of 28 per cent over the next four years.