IT Exports up by 10% in August 2023
Staff Report
IT Exports in August 2023 in Pakistan amounted to US$235 million, recording a 10% increase on a Month-over-Month (MoM) basis.
The increase was mainly due to a higher number of working days compared to July 2023.
Segment-wise, Telecom and Computer Services exports increased by 12% and 9% MoM, respectively.
These August 2023 IT export figures are better than the 12-month average of US$218 million. Pakistan’s IT Exports in May 2023 Surge 24%, Reach US$236mn
The Month on Month (MoM) improvement in IT exports for August 2023 is primarily attributed to a higher number of working days compared to July 2023,” Topline Securities said in a report.
However, it’s worth noting that higher clearing days affected the realization of proceeds from IT exports, though the proceeds per day remained flat MoM in August 2023.
Among Computer Services, Hardware and Software Consultancy exports saw impressive growth, with a 21% and 18% MoM increase, respectively, in August 2023.
Services Exports (Excluding IT) of Pakistan also increased by 14% MoM, partly due to the reasons mentioned above.
On a YoY basis, IT exports for August 2023 increased by 3% to US$235 million, driven by an 11% YoY increase in Telecom and a 1% YoY increase in Computer Services.
These reported IT export figures represent the amount remitted back to Pakistan by technology companies, although IT companies are retaining a significant portion of their proceeds outside the country due to declining business confidence and exchange rate volatility.
According to the IT Minister, IT companies are holding around US$1-2 billion outside Pakistan.
In the first two months of FY24 (2MFY24), IT exports increased by 5% YoY to reach US$449 million.
The improvement in IT exports reflects the global increase in IT spending, with worldwide IT spending projected to reach US$4.7 trillion in 2023, a 4.3% increase from 2022 according to Gartner Inc., a technology research and consulting firm.
Going forward, software and IT services spending are expected to increase by 13.7% and 8.8%, respectively, in 2023, according to Gartner research.
This growth is attributed to increased utilization, reallocation of spending to core applications and platforms, and vendor price increases.
Net IT Exports (Exports-Imports) for August 2023 increased by 7% MoM and by 3% YoY to US$204 million.
In 2MFY24, Net IT Exports increased by 4% YoY to US$394 million, compared to a 5% YoY increase in the overall IT exports number.
On a trailing twelve-month (TTM) basis as of August 2023, Net IT Exports have grown by 13% YoY to US$2.3 billion.
The software segment is expected to see double-digit growth in 2023, presenting opportunities for companies like Systems Limited (SYS), which is considered a top pick in the IT sector,” the report adds.
In August 2023, Telecom Services exports increased by 12% MoM and by 11% YoY to reach US$46 million.
Computer Services exports increased by 9% MoM and by 1% YoY to US$189 million.
The total share of Telecom/Computer Services exports for August 2023 stood at 20%/80% respectively, compared to 18%/82% share in August 2022.
In 2MFY24, the Telecom/Computer share of exports remained at 19%/81%, similar to the same period last year.
