IT exports rise 47pc to $2.1bln in FY2021

KARACHI: Pakistan’s information technology (IT) exports soared 47 percent to $2.1 billion in the fiscal year ended June 30, according to latest figures from the State Bank of Pakistan (SBP).

The country fetched $1.4 billion in IT exports in July-June FY2020. IT exports increased 50 percent year-on-year to $214 million in June. These exports stood at $143 million in the corresponding month of the previous fiscal year.

Similarly, the import of IT products and services also rose to $550 million in FY2021 from $385 million a year earlier. The higher growth in the country’s technology product and services exports was due to the coronavirus pandemic related rise in freelancing activities.

Telecommunications, computer and information services are the major items of services exports. The country’s IT services firms continue to make deeper inroads into the global market, utilizing the explosive growth in demand amid the pandemic for a wide range of IT services.

Besides, the preference of the consumers towards using digital channels to fulfil their day-to-day needs and meet payments and the measures taken by the central bank has contributed to the rise in the exports of IT services. Electronic banking transactions rose 29 percent to Rs22.5 trillion in the third quarter of FY2021, according to SBP’s data.

The SBP 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. The growing usage of digital financial services due to the coronavirus pandemic is boosting the growth of startups in Pakistan.

Pakistan’s tech startups raised around $128 million in January-June 2021. The surge in these investments was due to huge global liquidity, ultra-low interest rates in Europe and the United States and the accommodative regulatory regime in Pakistan.

Coronavirus lockdowns have pushed economic activity online. Startups in the e-commerce, fintech, transport and healthcare sector are getting a boost. However, the encouraging information and communication technology exports were offset by a weakening in receipts from other services sectors, including the transport.

Export proceeds of the transport sector fell to $567 million in FY2021 from $741 million a year ago. The SBP’s data further revealed that exports of services stood at $5.937 billion in July-June FY2021, compared with $5.437 billion in the corresponding period of FY2020. Meanwhile, the import of services declined to $7.812 billion from $8.753 billion.