In August 2023, Pakistan’s information technology (IT) exports saw a 10% increase, reaching $235 million compared to the previous month. This growth was primarily attributed to the higher number of working days in August as opposed to a decrease in holidays compared to July.
Federal Minister for Information Technology, Dr. Umar Saif, recently reiterated his commitment to boosting IT exports from $2.62 billion to a target range of $10 to $20 billion. Initially, he had aimed for $15 billion, but substantial progress in IT exports has not yet materialized.
The IT sector faces several challenges stemming from the ongoing economic crisis, including fees for spectrum allocation to IT companies in dollars and high tax rates, which are hindrances to its growth. Experts emphasize the critical need for investment to augment IT exports, emphasizing that this can only be achieved by addressing the existing problems and ensuring the presence of stable policies.
In August, IT exports recorded an upturn compared to the 12-month average, with a total of $218 million. A report from Topline Securities indicates that the rise in IT exports in August was primarily due to the increase in working days or a reduction in holidays. Impressively, computer services, hardware, and software consultancy exports registered substantial increases of 21% and 18%, respectively, on a monthly basis.
On an annual basis, IT exports showed modest growth of 3%. These statistics are based on remittances sent by IT companies to Pakistan, with many companies opting to retain their profits abroad due to concerns about unstable policies and fluctuating exchange rates. The report does not account for an estimated $1 to $2 billion in capital that IT companies are holding outside Pakistan.
For the first two months of the current fiscal year, IT exports have increased by 5% to reach $449 million. In August, net IT exports rose by 7% compared to the previous month and 3% on an annual basis, reaching $204 million. Over the initial two months of the fiscal year, net IT exports experienced a 4% year-on-year increase, totaling $394 million.