Record Breaking Growth in Pakistan IT Sector in December 2024

Pakistan IT sector recorded the highest monthly exports ever at 348 million dollars in December 2024. This reflects a 15 percent increase compared to December of the previous year according to data from Topline Pakistan Research.

Exports from the IT sector also rose by 12 percent compared to November 2024. This is the fifteenth straight month of year on year growth in IT exports, which started in October 2023, and exceeds the 12-month average of 299 million dollars.

In the first half of FY25, total IT exports reached 1.86 billion dollars, showing a 28 percent increase compared to the same period last year. Export proceeds in December averaged 16.6 million dollars per day, compared to 14.8 million dollars per day in November.

The growth in year on year exports can be attributed to several factors as noted by Topline Research. These include an expanding global client base particularly in the Gulf Cooperation Council region and regulatory relaxations introduced by the State Bank of Pakistan. The State Bank increased the permissible retention limit for specialized foreign currency accounts from 35 percent to 50 percent. It also launched a new category named Equity Investment Abroad allowing IT exporters to invest in foreign entities using up to half of their foreign currency account proceeds.

These measures have boosted confidence among IT exporters and encouraged them to bring more of their profits back into the country. A survey conducted by the Pakistan Software Houses Association found that 62 percent of IT companies now use specialized foreign currency accounts.

Pakistani IT firms have also increased their engagement globally by taking part in international events like the Oslo Innovation Week 2024 and the Pak US Tech Investment Conference.

Although gross IT exports hit record highs, net IT exports for December 2024 stood at 222 million dollars, which is a 16 percent decline year on year and below the 12-month average of 265 million dollars.

Looking forward, the IT sector is expected to continue its growth with an anticipated annual increase of 10 to 15 percent in FY25. Total exports could potentially reach 3.5 to 3.7 billion dollars. Under the government Uraan Pakistan economic plan, the goal is set at 10 billion dollars in IT exports by FY29, which would require a compound annual growth rate of 28 percent.

Among industry leaders, Systems Limited has been a standout performer. The company is trading at forward price to earnings ratios of 15.3x for 2024 and 11.4x for 2025, positioning it as a key player in the rapidly growing IT sector.