Services sector emerges as Pakistan's economic lifelineBreaking

May 06, 2024

Amid the challenges faced by traditional sectors, the services sector stands out as Pakistan's immediate hope for economic rejuvenation. By strategically prioritising its development and leveraging global trends, Pakistan can position itself as a dynamic player in the digital economy while simultaneously strengthening its domestic market resilience. Speaking to WealthPK, M Yousaf Sajid, Regional Manager North, Digital World Pakistan Private Limited, a service provider, said Pakistan's economy had long been reliant on traditional sectors like agriculture and manufacturing. "However, these sectors have faced challenges such as productivity fluctuations, external market dependencies and vulnerability to climate change." "One of the key factors fuelling the expansion of Pakistan's services sector is the demographic dividend. With a young and increasingly urban population, there is a growing demand for services ranging from digital connectivity to financial inclusion," he stated.

"Though the services sector has shown resilience, there are still structural impediments that need to be overcome. Investments in infrastructure, regulatory reforms, and skill development initiatives are essential to foster sustained growth and competitiveness in the sector." Yousaf opined that IT-related ventures were exhibiting notably superior performance in the national economy. "The increasing digitisation of businesses and the broader economy in Pakistan has created a fertile ground for the proliferation of IT-related ventures." "Despite the notable performance of IT-related ventures in Pakistan, it is imperative to acknowledge that the country still lags behind its peer economies in certain key metrics. A pertinent example is the considerable gap between Pakistan's total IT exports, valued at approximately $1.92 billion per annum, and India's robust IT export earnings, which stand at an impressive $100 billion.

This substantial disparity underscores the considerable difference in the respective IT export capacities of the two nations," he remarked. According to the latest data from the Pakistan Bureau of Statistics, the exports of services in February 2024 went up by 6.09% year-on-year to $627 million compared to $591 million in February 2023. Conversely, on a monthly basis, exports dropped by 8.06% compared to the figures for January 2024. Cumulatively, in 8MFY24, services exports dropped by 1.36% YoY to $5.08 billion compared to exports of $5.15 billion in 8MFY23. Of the total exports made, telecommunications, computer and information services made the largest contribution, with an amount of $257 million in February 2024, witnessing an increase of 31.79% compared to exports in the same month last year.

Credit: Independent News Pakistan