Pakistan’s economy is again hunting for a growth engine, and the World Bank thinks it knows where to look: the digital sector. Its April 2025 “Re-imagining a Digital Pakistan” update estimates the ICT sector already contributes about 3 percent of GDP, yet digital exports still make up barely 0.1 percent of world trade, a gap the Bank says could add up to two percentage points to Pakistan’s annual growth if closed through better connectivity, payment rails, and data-sharing rules.

Digital exports still make up barely 0.1 percent of world trade.

Early signals are encouraging. Cumulative IT and IT-enabled services exports hit almost US$3.5 billion in the first eleven months of FY25, a 19 percent year-on-year jump that has kept overall services receipts in surplus despite headwinds elsewhere. Meanwhile, the State Bank’s latest Payment Systems Review shows mobile apps, wallets, and internet banking processed 2.14 billion retail transactions worth PKR 154 trillion in the second quarter alone, 88 percent of all retail payments by volume, while Raast cleared another PKR 6.4 trillion instantly, proving that scale can arrive quickly once frictions fall.

Infrastructure targets are finally matching that momentum. The National Fiberization Plan aims to pass 7.5 million additional homes with fibre and lift fibre-to-the-site coverage from 20 percent to 80 percent within five years, backed by one-window rights-of-way reforms. Parallel to this, regulators still insist 2025 will be Pakistan’s “Year of 5G”, with spectrum auctions, operator trials, and universal-service subsidies converging on a mid-year commercial launch and an average 50-100 Mbps download target. If executed, these steps could slash latency, unlock cloud services for SMEs, and create the backbone for AI-enabled public services from tele-health to precision agriculture.

Yet digital optimism rides on fragile scaffolding. Venture funding, which provides the risk capital for platform growth, collapsed 70 percent in 2024 and remains scarce; the first half of 2025 raised barely US$23 million across all startups, far below pre-pandemic peaks. Fixed-broadband penetration is still under two percent, average speeds hover near 15 Mbps, and device costs and patchy electricity keep at least 60 million adults offline. Add periodic social-media shutdowns and ad-hoc tax rulings, and it is clear why many founders consider relocation part of their contingency plan.

Venture funding collapsed 70 percent in 2024 and remains scarce.

Policy, therefore, has to shift from episodic incentives to systemic reform. Completing the Universal Service Fund’s fibre backbones in underserved districts, expanding device-financing schemes for women-led households, integrating NADRA IDs with Raast for seamless KYC, and adopting open-data standards for agriculture and transport could raise productivity far faster than another cycle of tax holidays.

The World Bank stresses that digital public infrastructure, identity, payments, and trusted data protocols must be interoperable across provinces to avoid the regulatory fragmentation that throttles private investment. Equally, the next Finance Bill should lock in predictable withholding-tax rates for freelancers and e-commerce sellers, giving the informal digital workforce the certainty it needs to scale.

If these pieces come together, Pakistan’s digital economy could shift from a promising niche to the demand engine the country has long lacked. The talent is already visible in the export numbers; the rails are being laid in fibre trenches and instant-payment switches; and the global services market is hungry for cost-competitive, English-speaking developers.

Pakistan’s ‘Year of 5G’ could unlock cloud services and AI-enabled public services.

What remains is the harder task of administrative follow-through, keeping spectrum prices realistic, protecting encryption, and resisting arbitrary platform bans. Do that, and digital value-added could feasibly double by FY28, cushioning the balance of payments and creating the formal, tech-enabled jobs that traditional manufacturing has failed to deliver. Miss the moment, and the window may close as regional competitors race ahead.

Disclaimer: The opinions expressed in this article are solely those of the author. They do not represent the views, beliefs, or policies of the Stratheia.