Despite the thriving potential in the global IT landscape, Pakistan is looking at a considerable shortfall in its IT exports.
The country has secured only $2.37 billion in the initial 11 months of the financial year 2023. As a result, it’s projected to miss its IT export target of $5 billion by almost 50%, according to a report by Topline Securities.
Factors such as political and economic uncertainty are contributing to declining business confidence. Furthermore, an unstable exchange rate prompts IT firms to retain more proceeds outside Pakistan.
The reported IT export figures only account for the income remitted to the country, excluding income retained abroad.
Overview of IT Exports in May 2023
In May 2023, the country saw a month-on-month (MoM) increase in IT exports, with total earnings amounting to $236 million, a 23% MoM jump from $191 million recorded in April 2023. On a segment-wise basis, telecom and computer services saw impressive increases of 92% and 11% MoM, respectively.
Within computer services, software exports, other services, and software consultancy experienced growth rates of 14%, 13%, and 8% MoM, respectively. The growth can be attributed to an increased number of working days in May, compared to April, due to the Eid holidays.
Expected Outcome for FY23
Based on the current trend, Pakistan’s IT exports will end at around $2.58 billion in FY23. In May 2023, export proceeds’ per working day realization declined to $10.7 million/day from $11.2 million/day in April 2023.
However, there is a silver lining. Compared to May 2022, IT exports for May 2023 saw a YoY growth of 28%, largely attributed to a 95% YoY increase in telecom and a 16% YoY increase in computer services.
Throughout 11MFY23, IT exports have marginally declined by 1% compared to the previous year. It’s important to note that despite an overall drop in exports, the net IT exports (exports – imports) for May 2023 increased by 26% MoM and 46% YoY to $211 million. Net exports from July 2022 to May 2023 have also increased by 16% YoY, totaling $2.1 billion.
