Pakistan IT and telecom sector exports hit highest level of history in first 9 months of FY 2020
ISLAMABAD - Pakistan IT and telecom sector exports hit highest level of history in first 9 months of FY 2020.
Pakistan’s IT and telecom related services have continued to grow in exports making its share in the overall exports of the services sector stand at over $1 billion during nine months of the current financial year 2019-20.
According to the statistics updated by the State Bank of Pakistan, the share of the ICT sector in overall exports stands at 24 percent or $1.052 billion in overall export of $4.247 billion of the services sector from July to March.
The ICT sector is followed by the multiple sectors which are termed as Other Businesses by the central bank that stood at $1.024 billion. It was followed by Government Goods and Services with $896 million exports.
The IT services exports have increased over the past three years and continue to increase despite the fact that the business scenario has entered a recession phase globally due to the COVID-19 outbreak.
The sector has crossed the mark of $1 billion twice in the last months of FY 2018 and 2019 as export values stood at $1.19 billion and $1.065 billion respectively. This year, the industry achieved the milestone in three quarters of the current financial year.
Overall, the IT sector made an export of $1.052 billion during the period of July to March in FY20 as compared to the export’s value of $879 million recorded in the similar period of last financial year, showing a year-on-year growth of 20 percent or $173 million. The export values will increase further in the rest of the months of the current financial year reaching another all-time high.
Although the growth in IT exports has been termed lower-than-expected, it has picked up the pace during this financial year with tremendous growth witnessed in the remittances. Not only did the exports driven through incentives by the government increased, but the reporting practice of the IT sector to the banking channels also improved. Besides, the depreciation of rupee against the dollar also enhanced export values in the financial year 2019-20.
Pakistan’s IT export is mainly in the US market followed by European countries and then a few Middle East countries. Exports are largely concentrated in the fields of software consultancy, BPO/ call center, telecommunication services, software development, and mobile app development. Future Outlook
The prevailing situation of business and economy is extremely challenging across the world. US and European countries being the major exporting market of the IT sector were hit hard by the COVID-19 outbreak showing no signs of respite.
The representative body of the IT industry, P@SHA carried out a survey report recently which revealed that companies are struggling with the loss of businesses, cancellation of orders, and delays in payments.
Globally, clients are halting projects, delaying the payments of already delivered ones, and considering completely dropping their contracts eventually. 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 economies therefore the IT industry might not continue its growth in exports at the present pace.
Presently, the workforce demand has decreased nearly 35 percent demand which might cause massive layoffs of around 25 percent of professionals in the next couple of months in addition to pay cuts, and unpaid leaves, the report said.
The association received feedback from over 200 companies employing nearly 35,000 in the survey.
Recently, one of the IT giants Netsol Technologies notified its employees about a pay cut and reducing working hours including an indication of layoffs in the worst scenario.