IT Exports Decreases 23% to Eight-month low in January 2023

Pakistan’s information technology (IT) exports for January 2023 decreased by 23% month-on-month (MoM) to lowest since May 2022. IT exports for Jan’23 stood at $190 million, with 20% and 35% MoM decline in computer and telecom services respectively. Among computer services, exports of computer software and software consultancy dropped by 25 percent and 15 percent MoM respectively.

IT Exports Decreases 23% to Eight-month low in January 2023

On year-on-year (YoY), IT exports for Jan’23 increased by 2 percent due to 8 percent YoY increase in telecom services. The exports for Jan-23 are lowest since May 2022 which was $184 million. The amount is below the 6-month rolling average of $221 million.

On a broader level, a slowdown is being witnessed after April 2022, with YoY growth averaging 3 percent in May 22-Jan 23, compared to average 32 percent YoY growth in prior nine month period of Aug 21-Apr 22.

The slowdown in IT exports is mainly indicative of a global slowdown in IT spending. In its latest report, Gartner has revised down its growth forecast of IT spending to 2.4 percent in 2023 from earlier 5.1 percent.

IT ministry of Pakistan has set an export target of $5bn for FY23. The current fiscal year monthly average run rate of $218 million indicates that Pakistan will be missing the export target by a big margin.

In 7MFY23, IT exports are up by 2 percent YoY to $1.52 billion. A slight growth has been due to 3 percent YoY growth in computer services to US$1.22bn.

Segment-wise breakdown for the month of January 2023 indicates that the telecom services declined by 35% MoM and increased by 8 percent YoY to $29.7 million. Similarly, computer services decreased by 20% MoM and increased slightly YoY to $159.9 million.

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