Despite ambitious goals, IT exports shrink 2%

Exports stand at $246m, impacted by global factors

KARACHI:

Despite the government’s ambitious goal of increasing information technology exports to $15 billion in the next few years, Pakistan’s IT exports dropped by 2% year-on-year and reached $246 million in December 2022.

The decline came primarily due to a 3% decrease in computer services’ exports. Analysts fear that the country may miss the IT export target for FY2022-23.

In December, Pakistan’s ICT exports were impacted by global factors and topped by overall recession, said Khurram Schehzad, CEO of Alpha Beta Core, while talking to The Express Tribune.

“There is a global trend where the tech companies facing financial constraints are opting for layoffs to cut costs, however, this is likely to end soon,” he said.

IT exports, however, increased by 6% MoM in December owing to a 13% rise in computer services, said Nasheed Malik, ICT analyst at Topline Research.

“Among IT services, software consultancy and exports rose by 14% and 28% MoM respectively.”

December exports reached close to $250 million for the first time after April 2022, but were down from the monthly peak of $260 million recorded in March 2022, he said.

“Slowdown has continued since April 2022 with YoY growth averaging 3% from May to December 2022, compared to average 26% YoY growth in the prior eight months from September 2021 to April 2022.”

Malik pointed out that the fall in IT exports reflected the impact of a global slow-down in IT spending and a widening gap between the inter-bank and open market currency exchange rates.

Pakistan’s IT ministry has set an export target of $5 billion for FY23.