Pakistan’s information technology (IT) sector continues to demonstrate impressive growth, with IT exports reaching $2.18 billion in the first seven months of the fiscal year 2024-25 (July-January). This marks a 27% year-on-year (YoY) increase, according to the latest data released by the State Bank of Pakistan (SBP).
Sustained Growth in IT Exports
The growth streak in IT exports has now extended to 16 consecutive months, beginning in October 2023. This consistent upward trend showcases the resilience and expanding global footprint of Pakistani IT companies.
In January 2025, Pakistan’s IT exports were recorded at $313 million, reflecting an 18% YoY growth compared to January 2024. However, this was a 10% decline month-on-month (MoM) from December 2024, when exports stood at $347 million. Despite the monthly dip, January’s exports remained higher than the 12-month average of $303 million, underlining a strong annual growth pattern.
Daily IT Export Proceeds
The daily export proceeds for January 2025 were estimated at $13.6 million, down from $16.6 million in December 2024. While the month-on-month decline suggests short-term fluctuations, the overall upward trajectory indicates sustainable long-term growth.
Key Drivers Behind the Surge in IT Exports
Several factors have contributed to the significant rise in Pakistan’s IT exports, including:
- Expanding Global Client Base: Pakistani IT firms are increasingly securing contracts in international markets, particularly in the Gulf Cooperation Council (GCC) region and North America.
- Relaxation of Retention Limits by SBP: The State Bank of Pakistan has increased the retention limit for IT export earnings in Specialized Foreign Currency Accounts (SFCAs) from 35% to 50%, allowing IT firms to retain more of their earnings for reinvestment and growth.
- Equity Investment Abroad (EIA) Initiative: The SBP now permits IT exporters to invest up to 50% of their foreign earnings in equity shares of overseas entities, boosting their presence in global markets.
- PKR Stability Encouraging Profit Repatriation: The stabilization of the Pakistani Rupee (PKR) has encouraged IT exporters to repatriate higher portions of their earnings, contributing to increased export proceeds.
Pakistan’s IT Industry on the Global Stage
Pakistani IT companies are actively engaging with international markets to attract investment and enhance their global standing. Recently, leading IT firms from Pakistan participated in key international events such as:
- Oslo Innovation Week
- Pak-US Tech Investment Conference
These engagements have played a crucial role in networking with global investors, securing new contracts, and expanding business operations in the international tech ecosystem.
IT Companies Leveraging Foreign Currency Accounts
According to a survey conducted by the Pakistan Software Houses Association (P@SHA), 62% of IT firms in Pakistan are utilizing Specialized Foreign Currency Accounts to manage their international revenue effectively. This move has enhanced the sector’s financial stability and allowed businesses to reinvest earnings strategically.
Net IT Exports Show Robust Growth
Pakistan’s net IT exports (exports minus imports) for January 2025 were $281 million, marking a 17% YoY increase and a 27% MoM rise. The monthly net IT export figure exceeded the 12-month average of $261 million, reflecting a steady expansion of Pakistan’s IT footprint in global markets.
Future Growth Projections and Government Targets
Industry analysts expect Pakistan’s IT export sector to maintain its strong growth momentum. Topline Securities projects a 10-15% growth in IT exports for FY25, bringing total annual IT exports to approximately $3.5-$3.7 billion.
The Government of Pakistan, under its ‘Uraan Pakistan’ national economic plan, has set an ambitious target of $10 billion in IT exports by FY29. Achieving this goal would require a compound annual growth rate (CAGR) of 28% over the next five years. If met, this would position Pakistan as a major IT hub in the region.
Systems Limited (SYS): The Leading IT Exporter
Among the publicly listed IT firms, Systems Limited (SYS) remains a top-performing company in Pakistan’s IT sector. SYS is currently trading at forward P/E ratios of 15.0x for 2025 and 11.2x for 2026, making it an attractive pick for investors looking to gain exposure to Pakistan’s booming IT industry.
A Promising Future for Pakistan’s IT Sector
Pakistan’s IT sector is on a robust growth trajectory, backed by strong government support, increasing global demand, and favorable SBP policies. With continued efforts to enhance global outreach, improve financial flexibility, and strengthen investor confidence, Pakistan is well-positioned to achieve its long-term IT export goals. If current growth trends persist, the $10 billion export target by FY29 could become a reality, cementing Pakistan’s position in the global IT industry.
