In the first quarter of the fiscal year 2023-24, Pakistan’s Information Technology (IT) and IT-enabled Services (ITeS) export remittances, which include computer services and call center services, saw a 3.3% increase, reaching $655 million, compared to $634 million in the same period last year. However, there was a notable decline of around 12.5% in September 2023 compared to August 2023, with ITeS export remittances dropping to $206 million.
On a year-on-year basis, the sector’s export remittances decreased by about 0.5% compared to September 2022. The broader Information and Communication Technology (ICT) sector, encompassing telecommunications, computers, and information services, experienced a negative growth rate of approximately 1% in the fiscal year 2022-23, falling to $2.597 billion from $2.619 billion in the previous fiscal year.
The Ministry of Information Technology and Telecommunications has identified various obstacles to the growth of Pakistan’s IT sector, including inconsistent policies, taxation issues, and banking challenges. Despite remarkable growth of 178% in IT & ITeS exports over the past five years at a Compound Annual Growth Rate (CAGR) of 30%, the sector faces persistent issues that erode the confidence of investors and partners, such as frequent changes in taxation policies on export proceeds. Addressing these challenges is vital for Pakistan to reach its IT and ITeS export potential of $15 billion and sustain its impressive growth.