Growing in double digits for the last six years (FY17-FY22), the IT exports of the country took a backseat in FY23 stagnating at the same level as last year – rather falling by around one percent year-on-year. Officially referred to as the Information and Communication Technology (ICT) services, the sector witnessed a slowdown in exports during a very precarious year. ICT exports grew sanguinely in in FY22 touching record levels with even higher targets for FY23. However, the sector exports have lost the pace since Dec-2022.
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 $2.6 billion during the FY23 versus $2.62 million in FY22. A look at the annual data from the central bank shows that in FY23, the share of telecom and computer services stood the same as in FY22 at 19 percent and 81 percent, respectively with the share of information services at less than a percent. In this, the telecom exports during FY23 were down by over three percent, while the computer services exports were flat. Remember that over the last six years the country has witnessed tremendous growth in computer services segment of exports. Overall, FY23 ICT export as a percentage of total export was however up to 7.4 percent versus 6.6 percent in FY22, which was due to weaker total export base – (exports of goods and services down by 11% in FY23.
The slowdown in IT exports is a result of not only external factors like global economic slowdown, but also internal factors like domestic economic and political insurgency over the last one year. The uncertainty at home in exchange rates as well as business climate forced tech companies to retain a greater portion of their income abroad as the official IT exports figures reflect only the dollars remitted to the companies and freelancers in the country and not held abroad.
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