IT exports increase by 16% in October

It's result of higher number of working days, higher realisation of proceeds by banking channels

LAHORE:

Pakistan’s Information Technology sector in October 2023 posted a 16% month-on-month growth, indicating a promising future for this particular industry. Export figures of the telecom, computer, and IT sector in October, as per the State Bank of Pakistan (SBP), stood at $238 million against $206 million in September 2023.

Segment-wise, telecom, computer, and IT services posted 49%, 9%, and 50% growth, respectively, on a MoM basis. According to Topline Research, IT exports in October on a monthly basis mainly increased due to a higher number of working days compared to September 2023 and a higher realisation of proceeds by banking channels, which increased by 5% in October.

Product-wise, software consultancy increased by 35% MoM, i.e., from $19 million to $74 million, whereas telecom services are up by 90%, i.e., from $14 million in September to $29 million in October 2023. Service exports, excluding IT, of Pakistan remained flat at $418 million in Oct 2023.

IT exports on a year-on-year basis, for October 2023 increased by 8% due to a good performance in the export of software consultancy, which is up 11% YoY, and computer services, which are up 19%.

The IT and telecom exports in the first four months of the current fiscal year also increased by 4.4% and stood at $893 million. In FY-23, total exports in this sector stood at $2.6 billion.

As per Topline Research, the reported IT export number indicates the amount remitted back to Pakistan by tech companies. These companies are retaining a greater portion of their proceeds outside Pakistan due to declining business confidence and volatility in the exchange rate.

Read: IT exports can be doubled in a year

According to IT Minister Umar Saif, these companies have parked around $1 to $2 billion outside Pakistan. Saif, who also showed his commitment to increase IT exports by one billion dollars, shortly after resuming his office as a caretaker minister, is now confident of increasing IT exports by $10 billion in the next three years.

“We will be launching our IT export strategy report tomorrow (Thursday). This has been developed in collaboration with a top-tier international consulting firm for Pakistan Software Export Board,” Saif tweeted on Wednesday.

The plan is to add 200,000 additional IT workforces in three years, which will accumulate exports in this particular segment by $5 billion. Establishing 10,000 E-Rozgar freelancing centres to generate $3 billion and another $2 billion through dollar retention accounts and Pakistan startup fund.

The SBP, in October, has also announced an increase in the permissible retention limit from 35% to 50% in the Exporters Specialised Foreign Currency Accounts, with a belief in an increase in IT exports in the coming months.

The stakeholders of the IT export industry, which also includes the freelancing community, believe that as soon as 5G technology arrives in Pakistan, the country will witness an IT boom. They believe this IT boom will be much bigger than the startup’s boom, which Pakistan has observed after the launch of the 4G spectrum.

Published in The Express Tribune, November 23^rd, 2023.

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