Tuesday, March 23, 2021

Pakistan Tech Exports Soar 69% in February 2021

Pakistan's technology exports shot up by 69% in February 2021 from the same month last year. Tech exports soared 41% for the first 8 months (July 2020-February 2021) of the current fiscal year from the same period period last year, according data released by the State Bank of Pakistan. 

Pakistan Tech Exports Trend. Source: Arif Habib Securities

Technology services exports from Pakistan continued their momentum into February 2021, rocketing up 69% to $179 million, up from $106 million in February 2020. ICT exports for the first 8 months of the ongoing fiscal year 2020-2021 rose 41% to $1.3 billion, on track to reach or surpass the $2 billion mark this year. 

In addition to jump in tech services exports, Pakistan is also seeing double-digit growth in exports of engineering goods, up 19.74% for the first 8 months of the current fiscal year.  Export of electric fans posted over 15% growth and other electrical machinery 17.16%.

There is real hope for Pakistan to dramatically increase its higher value-added exports if the current trends in tech services and engineering goods can be sustained. Seizing the opportunity to attract export-oriented investors will help Pakistan become the next Asian Asian Tiger economy. It will help the country avoid recurring balance-of-payments crises that have forced the nation to seek IMF bailouts with all their tough conditions. Focusing on "Plug and Play" Special Economic Zones (SEZs) is going to be essential to achieve this objective.


Riaz Haq said...

#Pakistan’s #exports to #US increased 11.9% to $3 billion in 8MFY21 during the (July-February). February monthly exports to US increased by 27.68% to $401.949 million from $314.8 million in February 2020 - Profit by Pakistan Today https://profit.pakistantoday.com.pk/2021/03/24/pakistans-exports-to-us-increase-11-9pc-in-8mfy21/#.YFvgnZSZFtw.twitter

Pakistan’s exports of goods and services to the United State (US) witnessed a surge of 11.86 per cent during the first eight months of the fiscal year 2020-21 (FY21) as compared to the corresponding period last year.

According to details, overall exports to the US were recorded at $3,082.2 million during the (July-February) period against exports of $2,755.2 million during the corresponding period in FY20, State Bank of Pakistan (SBP) data revealed on Thursday.

Meanwhile, on a year-to-year (YoY) basis, exports during February 2021 also increased by 27.68pc, from $314.8 million against the exports of $401.949 million.

However, on a month-on-month (MoM) basis, exports rose by 0.5pc during February 2021 in comparison with exports of $399.9 million in January 2021, SBP data said.

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Overall, the country’s exports to other countries witnessed a decline of 2.26pc in 8MFY21, from $16.438 billion to $16.065 billion.

On the other hand, imports from the US during the period under review were recorded as $1,467.5 million against $1,470.7 million last year, showing a nominal decrease of 0.24pc in 7MFY21.

The overall imports into the country increased by 8.59pc, from $29.6 billion to $32.1 billion.

Earlier, Pakistan’s exports to the United States surpassed the $400-million mark during the months of October and November 2020.

The US also remained the top export destinations of the Pakistani products during the first four months (July-Oct) of FY21, followed by United Kingdom (UK) and Germany.

Meanwhile, Pakistan’s exports to regional countries declined 22 per cent in the first eight months of the current fiscal year due to the impact of Covid-19.

Exports to Afghanistan, China, Bangladesh, Sri Lanka, India, Iran, Nepal, Bhutan and the Maldives fell to $1.171 billion in 8MFY21, from $1.504bn the previous year, according to the latest data compiled by the State Bank of Pakistan.

On the other hand, the country’s trade deficit with the region narrowed slightly during the period under review as imports from these countries also dipped.

Pakistan’s exports to Afghanistan fell 13.6pc to $629.324m in 8MFY21 from $728.315m in 8MFY20. A few years ago, Afghanistan was the second major export destination after the United States.

Riaz Haq said...

PKR is getting stronger against the US$ over the last few months. The rupee has recovered more than Rs12 during the last seven months since it touched an all-time low of Rs168.43 last year in August. https://arynews.tv/en/pakistani-rupee-strengthens-against-us-dollar-9/

According to the State Bank of Pakistan (SBP), the local unit closed at Rs155.39 against the greenback as compared to Monday’s closing of Rs155.85.

The local currency has gained considerable ground on the back of improved foreign exchange reserves, current account surplus, higher remittances besides less demand of dollar due to the ongoing pandemic.

The rupee has recovered more than Rs12 during the last seven months since it touched an all-time low of Rs168.43 last year in August.

samir sardana said...

Like I said in my Post as under - ITES exports is THE key pillar.Manufacturing takes time, and has a supply chain,which can be DISRUPTED by COVID and war - but ITES exports,are done by manhours and transported by the internet and marginal logistics
September 29, 2020 at 1:45 PM

September 29, 2020 at 1:45 PM
My Post - India is at 400 per 10 million - which is what makes it unbelievable ! But this sudden and unexpected reduction in the daily count in USA,Brazil and India and the sharp spike ONLY IN EUROPE,is FISHY !

November 2, 2020 at 6:55 AM
My Post - There is a pipeline of pendemics coming - human and THEN,plant based.Pakistan has the right location,the right DNA and genes of its population,optimal interbreeding of races and the RIGHT SIZE of the population.

THIS MAKES PAKISTAN THE ONLY CHOICE.Vietnam has NO RULE OF LAW and is an importer nation.If the import supply chain is disrupted (which it will be),all manufacturing will collapse,and then the banks,and then the Viet Dong ! EU WILL HAVE TO OUTSOURCE MANUFACTURING !

The IT services in the Pakistan Manufacturing sector,have perfected the low cost IT services of Pakistan.With the power shortages and power quality of users,data overload,data security, vagaries in manufacturing/trade/social operations,IT staff availability,cost sensitivity of Pakistan users of ITES. HENCE, Pakistan has a severely stress tested ITES exports model.

But most important,is the opportunity in the ITES exports,in the entertainment sector - which will include the GAMING SECTOR,and its derivatives.This is the sector where the ingenuity,resilience,grit and creativity of the Pakistani brain and spirit,will excel.These traits are the cutting edge,of the Pakistani DNA.

And as I said in my 1st post above - the Pakistani IT Engineers,have to learn Chinese and integarte into the ITES value chain in PRC.dindooohindoo

Ultimately,the Pakistanis need to note,that the competition is Sambhar Dosa Masala Dosa of India ! It is easy meat !

ITES is the only sector,completely INSULATED from PKR/USD and Global Commodities - and it LEVERAGES upon,the Pakistan Manufacturing Sector.The Agri supply chain,via the fuel and power costs and fertiliser costs,is linked to global FX and Comex rates.

Jiye Jiye Pakistan !

Riaz Haq said...

Mar-21 IT exports up by 58% YoY to USD213mn. 9MFY21 IT exports up by 44% YoY to USD1.5bn 💪


Riaz Haq said...

IT sector records sluggish growth at 5%
Analysts say growth hindered due to government indifference, inconsistent policies


Despite being entirely free from the cumbersome process of acquiring Letters of Credit (LCs) and not being dependent on imports for its raw material, the export volume of the information technology (IT) sector only grew a meagre 5% in November year-on-year (YoY). Analysts are laying the blame for this low number on the government’s indifference towards unconventional export sectors.

Speaking to the Express Tribune on the condition of anonymity, an official from the Ministry of Information Technology and Telecommunication said, “Globally, IT companies’ exports grow in hundreds and thousands of times, a potential that Pakistan has in abundance but cannot tap into due to inconsistent policies. The cooperation of the finance ministry, Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) is crucial in this regard.”

“Any suggestion given to them by our ministry, however, is ignored,” said the official, lamenting that, “People in the government do not understand the export potential held by the IT sector.”

According to a Topline Research report by IT Analyst Nasheed Malik, “Pakistan’s IT exports for November 2022 increased by 5% YoY to $233 million due to a 29% jump YoY in telecom services. The exports also increased by 5% month-on-month (MoM) due to a 15% MoM increase in telecom services and 3% MoM in computer services.”

“The latest export number is also above the six-month rolling average of $221 million. Exports, however, are down by 10% from a peak of $260 million recorded in March 2022 but managed to cross the $230 million mark set in June 2022,” said Malik.

However, on a broader level, a slowdown is being witnessed with YoY growth averaging 6% in the last six months (June to November 2022), compared to the average growth of 17% YoY in December to May 2022.

“The IT Ministry has set an export target of $3 billion for FY2023,” said Malik, adding that, “With a current fiscal year monthly average rate of $217 million and a six-month rolling average of $221 million, there are concerns about whether Pakistan will be able to achieve the set target.”

In the five months of FY2023, IT exports are up by 3% YoY to $1.09 billion – the slight growth was witnessed due to a 5% YoY growth in computer services to $864 million.

According to a report conducted by Arif Habib Limited, the SBP’s reserves currently stand at around $6.7 billion, the lowest since January 18, 2019. Including the banks’ reserves of $5.9 billion, the total foreign reserves in the country stand at $12.6 billion – amounting to an import cover of less than one month – 0.99 months to be exact.

ICT Expert Parvez Iftikhar said, “So far, no government has been able to comprehend that the IT sector can help the country earn dollars without incurring any huge expenditures on raw material imports. This just indicates the lack of understanding in the government’s finance management team that decides on taxes and concessions.”

“If we equip our youth, however, with in-demand skill sets, facilitate them with in/out dollar payments, and high-quality internet connectivity, they’re quite capable of doubling the country’s exports within two years,” claimed Iftikhar, adding that the solution “isn’t even out-of-the-box!”

Si Global CEO Noman Ahmed Said told the Express Tribune that, “It is no secret that Pakistan is currently facing one of its worst economic crises yet and whilst the tech sector has consistently outperformed, it is no longer feasible for it to continue doing so at a snail’s pace.”


“Growth has slowed, but the trend still remains positive,” said Khurram Schehzad, CEO of ABCore.