According to data from the State Bank of Pakistan, Technology exports from Pakistan declined by 27% in May 2021, compared to the previous month, to the lowest level since February 2021.
Exports amounted to $183 million in May, down from $249 million in April. On a year-on-year basis, exports were down 8%.
According to data from the technology sector, exports have been steadily increasing over the past year. In the 11 months of this fiscal year, exports have jumped 25 percent to $2.4 billion.
This sector contributes 38 percent to overall services export. In May, total services exports fell 20 percent MoM, but have increased 18 percent since July of last year.
Whilst the export performance of IT services firms has been encouraging, helping to increase foreign exchange earnings for the country, the monthly decline in their export numbers in May is not a healthy development for the country’s trade or the current account deficits.
It is believed that the decline in IT exports is a result of the extended Eid holidays. However, the growth in the country’s technology product and services exports has remained higher since the pandemic, helped by a rise in freelancing activities.
Within ICT, exports increased across almost all segments, including software consultancy, call centers, and telecom services.
The government and the SBP are working to promote the growth of the services sector. This includes facilitating the receipt of export earnings and tax rebates and incentives.
Pakistan’s digital services firms and tech entrepreneurs are increasing their exports and are now also benefiting from the sharp increase in global investments flowing into tech startups, the central bank stated in the first quarterly report on the state of Pakistan’s economy for FY2022.
One of the primary outcomes of the Covid-19 outbreak and the resultant social distancing and containment measures has been the acceleration of the digitization trend. The SBP, citing a study, said that an estimated 70 million additional people became digital consumers in the Southeast Asia region after the beginning of the pandemic.