Pakistan’s IT and telecommunications services continued to grow in exports, with a share of more than $1 billion in total exports from the services sector over the nine months of the current financial year 2019-20.
As per the official data released by the State Bank of Pakistan, the share of the ICT sector in overall exports stands at 24% or $1.052 billion in overall export of $4.247 billion of the services sector from July to March.
The exports of IT services have increased over the past three years and continue to grow regardless of the fact that the market scenario has entered a recession process due to the novel coronavirus pandemic.
During the last months of fascial year 2018-2019, the sector crossed the $1 billion mark twice as export prices stood at $1.19 billion and $1.065 billion respectively. In three quarters of the current financial year the industry reached the milestone this year.
In general, during the FY20 period from July to March, the IT sector made an export of $1,052 billion compared to the export value of $879 million reported in the same period last year, showing a year-on-year growth of 20 per cent or $173 million. The export prices will further increase to another all-time high in the remaining months of the current financial year.
As IT export growth has been called lower than expected so, it has picked up the pace with tremendous growth in remittances in the current financial year. The exports driven by government incentives not only increased but also strengthened the reporting practice of the IT sector to the banking channels.
Pakistan’s IT export is basically in the US market followed by European countries and then a few countries in the Middle East. Exports are primarily concentrated in the fields of software outsourcing, BPO / call center, telecommunications infrastructure, internet production and creation of mobile devices.
The current market and economic situation around the globe is highly challenging. As the main export market for the IT sector, the US and European countries were hit hard by the COVID-19 outbreak which showed no signs of respite.
Recently, the representative body of the IT industry, P@SHA, published a survey report which revealed that businesses are struggling with loss, order cancellation, and payment delays.
Numerous businesses have already created alternate strategies for the future which includes:
- Aggressive business development and seeking more opportunities.
- Retaining a certain percentage of salaries with a promise to return in 2021.
- Freeze hiring.
- Continuation of Work-From-Home to reduce office expenses.
- Reducing administrative expenses, cash benefits, etc.
- Cut on extra expenses i.e. bonuses, medical, over-time, etc.
- Postponing appraisal and bonus program.
- Bank loans and financial support from directors
- Laying off non-serious and unproductive employees only