ICT exports in 11MFY23

The Information and Communication Technology (ICT) services exports growth was sanguinely in double digits in FY22. However, the sector has been witnessing some slowdown in exports since December last year as can be seen from the illustration with monthly ICT exports

The latest data from the State Bank of Pakistan (SBP) shows that the country’s exports of telecom services, computer services and information services (collectively written here as ICT) stood at $2.37 billion during the first eleven months of FY23. That is a relatively flattish growth of 0.6 percent year-on-year versus 11MFY22 that witnessed highest ever ICT exports in the country’s history during the 11-month period.

A look at the latest data from the central bank shows that in 11MFY23, the share of telecom and computer services stood almost the same as in 11MFY22 at 19 percent and 81 percent, respectively. In this, the telecom exports during 11MFY23 were down by two percent, while the computer services exports were flat. Information service exports make up an insignificant share of the total sector export despite the segment witnessing growth over the past couple of year. Overall, 11MFY23 ICT exports as a percentage of total exports were up to 7.3 percent versus 6.7 percent in 11MFY22; whereas the sector’s share in total service exports during the period stood at 36 percent versus 37 percent of 11MFY22.

On monthly basis, the ICT exports in May 2023 witnessed a jumped by 28 percent year-on-year primarily due to low base effect. The sector exports increased by 24 percent month-on-month due to more working days in May versus April that was short due to Eid – ul – Fitr holidays.

While the recent uptick in ICT exports was much needed, the 11MFY23 numbers show weakening and part of it is due to significant - if not greater - portion of proceeds being retained out of the country due to taxation concerns, exchange rate fluctuation, and debilitating economy.