KARACHI: Pakistan’s Information Technology (IT) exports recorded an increase of five per cent on a year-on-year basis to reach $233 million in November owing to a 29 per cent year-on-year jump in the telecom services.
The export number also increased 5 per cent on a monthly basis due to a 15 per cent increase in the telecom services and 3 per cent in computer services.
The latest export numbers are also above the six-month rolling average of $221 million. However, the exports are down 10 per cent from the peak of $260 million recorded in March 2022.
Nasheed Malik at Topline Securities said that the exports crossed the $230 million mark after June 2022. However, on a broader level slowdown is being witnessed with year-on-year growth averaging six per cent during the last six months of 2022, compared with the average 17 per cent year-on-year growth during December to May 2022.
“The IT Ministry has set an export target of $3 billion for the fiscal year 2023. However, the current fiscal year monthly average run rate of $217 million and six-month rolling average of $221 million have raised concerns whether Pakistan will be able to achieve this target,” he added.
The slowdown in the IT exports is also indicative of the global slowdown in IT spending due to monetary tightening and inflation.
According to a report by Gartner, a technology research and consulting firm, the growth in IT spending is expected to slow down to one per cent in 2022 compared with 10 per cent growth in 2021.
Despite the slowdown in growth, Pakistan’s IT exports as a percentage of total exports have reached 8.1 per cent, compared with 6.7 per cent in November 2021, and 7.8 per cent in October 2022.
During the first five months of the fiscal year 2023, the IT exports were up three per cent on a year-on-year basis to clock-in at $1.09 billion, where slight growth has been observed due to a five per cent year-on-year growth in the computer services to $864 million.
“The growth in the sector is not being reflected due to volatility in the value of the rupee, compared to the dollar and difference of exchange rate between interbank and open market,” Malik said.
The growth in the IT companies and training of IT professionals led to a rise in the share of computer services. This value addition is leading to higher net exports of the sector since computer services exports are mostly human resource driven, he remarked.
As of November 2022, the trailing twelve months (TTM) IT exports have increased 11 per cent on a year-on-year basis to $2.65 billion, compared with 45 per cent growth in November 2021.
The net exports on TTM basis as of November 2022 grew 19 per cent year-on-year to $2.14 billion.
Segment wise breakdown for November indicates that telecom services increased 15 per cent on a monthly basis and 29 per cent on a yearly basis to $56.3 million. The computer services increased three per cent on a monthly basis and were flat year-on-year to reach $176.4 million.
The total share of telecom and computer services exports in November stood at 24 per cent and 76 per cent, compared with 20 per cent and 80 per cent, respectively, in November 2021.
During the first five months of the fiscal year 2023, the telecom and computer share of exports stand at 20 per cent and 80 per cent, compared with 21 per cent and 79 per cent during the same period of last fiscal year.
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