Saturday September 18, 2021

IT exports increase 47pc to $1.9bln in 11 months

June 26, 2021

KARACHI: Pakistan’s information technology exports increased 47 percent to $1.9 billion during 11 months of the current fiscal year of 2020/21, the central bank data showed on Friday.

IT exports rose 59 percent year-on-year to $200 million in May. The exports were $126 million in the same month of last year.

Telecommunications, computer and information services are the important items of services exports.

The State Bank of Pakistan’s (SBP) data further showed that exports of services stood at $5.3 billion in July-May FY2021 compared with $5 billion in the corresponding period of last fiscal year.

The growth in the country’s technology product and services exports is attributed to COVID-19 induced surge in freelancing activities.

Within information and communication technology services, the growth mostly originated from software- and hardware-related services. It is worth noting that Pakistani workers, including freelancers, are already well-integrated into the global gig economy. In fact, at the global level, Pakistan is host to the third-largest number of freelancers working on the most popular web platforms for contractual jobs. This allowed the country to capture the increase in global demand for ICT services during the period. The ministry of commerce facilitated enlisting more than 30 exporters on the world’s leading online marketplace, Amazon.com, on a trial basis. This could potentially open a new avenue for Pakistan to increase its exports and create new employment opportunities locally.

The measures taken by the SBP has contributed to the rise in the exports of IT services.

The central bank allowed exporters of goods and services, including IT based services, to retain a certain portion of their export proceeds in their special foreign currency accounts.

In order to facilitate the exporters, the SBP broadened the purposes for which the funds retained in these special foreign currency accounts can be utilised. Banks are allowed to make payment from the accounts for a number of new purposes in addition to existing ones. However, there is no change in the percentage of export proceeds allowed to exporters for retention in these accounts.

“The Covid-19 pandemic has significantly accelerated the pace of digital transformation across the world. Necessitating widespread lockdowns and social distancing protocols, the pandemic has served as a litmus test for the preparedness and resilience of the global economy to deal with the unprecedented and unanticipated societal and commercial disruptions,” the SBP said.