ISLAMABAD – Pakistan IT and telecom sector exports hit highest level ofhistory in first 9 months of FY 2020.
Pakistan’s IT and telecom related services have continued to grow inexports making its share in the overall exports of the services sectorstand at over $1 billion during nine months of the current financial year2019-20.
According to the statistics updated by the State Bank of Pakistan, theshare of the ICT sector in overall exports stands at 24 percent or $1.052billion in overall export of $4.247 billion of the services sector fromJuly to March.
The ICT sector is followed by the multiple sectors which are termed asOther Businesses by the central bank that stood at $1.024 billion. It wasfollowed by Government Goods and Services with $896 million exports.
The IT services exports have increased over the past three years andcontinue to increase despite the fact that the business scenario hasentered a recession phase globally due to the COVID-19 outbreak.
The sector has crossed the mark of $1 billion twice in the last months ofFY 2018 and 2019 as export values stood at $1.19 billion and $1.065 billionrespectively. This year, the industry achieved the milestone in threequarters of the current financial year.
Overall, the IT sector made an export of $1.052 billion during the periodof July to March in FY20 as compared to the export’s value of $879 millionrecorded in the similar period of last financial year, showing ayear-on-year growth of 20 percent or $173 million. The export values willincrease further in the rest of the months of the current financial yearreaching another all-time high.
Although the growth in IT exports has been termed lower-than-expected, ithas picked up the pace during this financial year with tremendous growthwitnessed in the remittances. Not only did the exports driven throughincentives by the government increased, but the reporting practice of theIT sector to the banking channels also improved. Besides, the depreciationof rupee against the dollar also enhanced export values in the financialyear 2019-20.
Pakistan’s IT export is mainly in the US market followed by Europeancountries and then a few Middle East countries. Exports are largelyconcentrated in the fields of software consultancy, BPO/ call center,telecommunication services, software development, and mobile appdevelopment.Future Outlook
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The prevailing situation of business and economy is extremely challengingacross the world. US and European countries being the major exportingmarket of the IT sector were hit hard by the COVID-19 outbreak showing nosigns of respite.
The representative body of the IT industry, P@SHA carried out a surveyreport recently which revealed that companies are struggling with the lossof businesses, cancellation of orders, and delays in payments.
Globally, clients are halting projects, delaying the payments of alreadydelivered ones, and considering completely dropping their contractseventually. Product-based companies are also going to face late payments,reduction of accounts, and even unsubscriptions, the reports said.
The economic slowdown has taken its toll on the businesses and economiestherefore the IT industry might not continue its growth in exports at thepresent pace.
Presently, the workforce demand has decreased nearly 35 percent demandwhich might cause massive layoffs of around 25 percent of professionals inthe next couple of months in addition to pay cuts, and unpaid leaves, thereport said.
The association received feedback from over 200 companies employing nearly35,000 in the survey.
Recently, one of the IT giants Netsol Technologies notified its employeesabout a pay cut and reducing working hours including an indication oflayoffs in the worst scenario.
