KARACHI: After managing just $2.37 billion in the 11 months of fiscal 2023, Pakistan is set to meet half of its $5 billion IT export target for 2023, JEE News report released on Wednesday said.
The country is falling short of the IT export target by a considerable margin due to a tussle in business confidence amid continued political and economic uncertainty. The IT ministry set a target of $5 billion for exports in FY23, which is expected to reach only $2.58 billion.
“IT players are relocating a large chunk of their revenue out of the country due to declining business confidence and exchange rate volatility,” Topline Securities said in the report.
The IT export number only indicates the amount that is repatriated to Pakistan by technology companies and freelancers. It does not include income held abroad.
In May 2023, IT exports were recorded at $236 million, up 23 percent month-on-month (MoM) from $191 million in April 2023.
Segment-wise, telecom and computer services grew by 92% and 11% MoM.
In computer services, exports of software, other services and software consultancy grew by 14%, 13%, and 8% MoM, respectively.
IT exports increased on a MoM basis on higher number of working days in May 2023 compared to the previous month (Eid holidays).
According to JEE News, the number of clearing days affects revenue collection.
May 2023 exports are the second highest in FY23 (December 2022: $246 million) and exceed FY23 average exports of $215 million.
IT exports are expected to reach $2.58 billion in FY23. IT export revenue declined to $10.7 million per day in May 2023 compared to $11.2 million per day in April 2023.
On a year-on-year (YoY) basis, IT export numbers for May 2023 increased by 28% on 95% YoY growth in telecom and 16% YoY growth in computer services.
The increase on an annualized basis is due to lower base effect (May 2022: $184 million) and interbank rates.
In 11MFY23, IT exports declined marginally by 1% compared to the same period last year. Total share of telecom/computer services exports for May 2023 stood at 24%/76%, up from 15%/85% share in May 2022.
In 11MFY23, Telecom/Computers accounted for 19%/81% of exports as against 20/80% in 11MFY22.
Net IT exports (exports – imports) for May 2023 grew 26% MoM and 46% YoY to $211 million.
Net exports rose 16% YoY to $2.1 billion in 11 months, while overall IT exports fell 1% YoY.
Pakistan’s total exports declined by 12.14% to $25.37 billion from July 2022 to May 2023, and the decline was attributed to several economic challenges, including hyperinflation, rupee depreciation, political instability and import restrictions. including shortage of raw materials.
