Pakistan Information Technology (IT) exports experienced a remarkable surge of 24% in May 2023, reaching a total of $236 million. This surge, compared to the previous month, is a positive sign for the IT sector.
The Topline securities Nasheed Malik said telecom and computer services showed notable growth on a month-on-month basis, with increases of 92% and 11%. The recorded growth rate, the export of software, other services, and software consultancy is 14%, 13% and 8% respectively.
Read more | The News Education Expo
Marginal Decline in IT exports
The increase on a YoY basis is partly due to the low base effect, as May 2022 witnessed IT exports totalling $184 million. Additionally, the increase may be attributed to the interbank rates reaching Rs298.93 on May 11, 2023. However, in the 11 months of FY2023, IT exports experienced a marginal decline of 1% YoY, recording $2.37 billion.
Malik highlighted that the IT export number only indicates the amount remitted back to Pakistan by tech companies and freelancers, excluding income retained abroad. He noted that IT players are retaining a greater portion of their proceeds outside the country due to declining business confidence and exchange rate volatility.
At the current run rate, IT exports are expected to reach $2.58 billion in FY2023, indicating a 1% YoY decline compared to FY2022, he said.
In terms of segment-wise breakdown, telecom services exhibited impressive growth, increasing by 92% MoM and 95% YoY, reaching $55.5 million in May 2023. Similarly, computer services grew by 11% MoM and 16% YoY, amounting to $180.3 million.
Net IT exports (minus imports) for May 2023 increased by 26% MoM and 46% YoY, reaching $211 million. Over the 11 months of FY2023, net exports increased by 16% YoY to $2.1 billion, contrasting the 1% YoY decline in gross IT exports.
Based on the trailing twelve months (TTM) basis as of May 2023, net IT exports grew by 17% YoY, amounting to $2.29 billion. As a result of the increase in IT exports in May 2023, the percentage of IT exports in total exports stood at 7.4% for the month.
Read more | First AI Summit in UK
Looking ahead, despite the global slowdown, Gartner research predicts that spending on software and IT services will increase by 12% and 9% respectively in 2023, presenting an opportunity for exporting companies in Pakistan.