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IT exports likely to miss target - LahoreEstate - 03-20-2009 08:50 AM
By Muhammad Yasir
KARACHI: The IT exports are likely to miss the 50 percent growth target set for the financial year 2008-09, as the global economic recession has affected the sector.
The country’s IT and computer services exports have registered 35 percent growth in the last eight months of the current financial year with $124 million as reported by State Bank of Pakistan (SBP). The IT industry has set its exports target at $255 million whereas last year the exports reached $169 million. On the contrary, Foreign Direct Investment (FDI) in Software Development has increased by 97 percent to 16.5 million during the Jul-Feb.
This is the lowest exports growth rate since 2004 because the exports have been witnessing 50 percent growth for the last five years.
Industry people were of the view the world would be experiencing its worst-than-expected economic crisis this year and the business conditions would not be supportive for businesses.
They added IT industry has started feeling the pinch of global economic slowdown as offshore demand of our exports is evaporating. They said the countries exports can be rebound once the resilience appears in global economies when the billion-dollar bailout packages start to stimulate demand.
Managing Director Pakistan Software Export Board (PSEB), Talib Baluch said the global downturn has exerted its impacts on the country’s exports which is temporary in nature as the growth is going to rebound soon on the back of high demand of global IT industry.
He explains that IT exporters have been incurring losses for last three months as their buyers are mostly in banking and automobile sector. “These companies will be provided financial leverage by their respective countries to rebuild their business, therefore, Pakistani exporters will also regain their demand,” the PSEB chief said. The global IT market has capability to attract business worth $475 billion.
United State of America is the largest buyer of Pakistan IT-enable service with the share of 58 percent in country’s exports. It is followed by UK, having ten percent share in total exports. The pie of total exports shows 16 percent share to the other countries including Australia, Canada, Thailand, UAE and others.
Industry experts said that expatriate Pakistanis have shifted their business from their residential countries as they got better opportunities and potential in Pakistan in this sector. They added that IT infrastructure is being built up rapidly in the country owing to tax holidays and availability of cheap labour.
http://www.dailytimes.com.pk/default.asp?page=2009\03\20\story_20-3-2009_pg5_5