Pakistan’s Telecom Takes Major Hit Dragging Overall IT Sector Down

The Pakistan Bureau of Statistics (PBS) released alarming figures today. Pakistan’s Information Technology (IT) & Telecom sector has recorded a negative growth of 28.70% during the first quarter (Q1) of FY 2025-26.

This massive slump signals a challenging period ahead for stakeholders. It calls for immediate measures to reverse this downward trajectory in one of the country’s most critical industries.

Mobile Revenue Drags Pakistan’s Telecom Down

The primary culprit for this decline is a significant reduction in the output of mobile companies. This sharp drop in revenue overshadowed other positive indicators.

Interestingly, IT exports actually increased during the first quarter. However, the impact of mobile company revenues weighs more heavily in the Annual National Accounts. Consequently, the sector’s Gross Value Added (GVA) took a severe hit. This performance stands in stark contrast to the Finance & Insurance sector, which posted a robust growth of 10.36%.

Economy Grows with Autos Surge

Despite the tech crisis, the broader economy is recovering. The National Accounts Committee (NAC) approved a total GDP growth of 3.71% for Q1 FY2025-26. The Industry sector led the charge with an impressive 9.38% growth, followed by Agriculture (2.89%) and Services (2.35%).

Large Scale Manufacturing (LSM) showed a positive growth of 4.10%, but the automobile sector stole the show. Automobiles grew by a massive 84.60%, and transport equipment followed with a 40.73% increase.

Conversely, the Mining and Quarrying industry struggled, showing negative growth of 4.13%. This was driven by declines in gas (-7.1%) and crude oil (-4.9%) production.

Revised Estimates for 2024-25

The NAC also updated annual estimates for the previous fiscal year (FY 2024-25). The revised GDP growth rate now stands at 3.09%, up slightly from the previously approved 3.04%.

Based on these latest figures, the overall size of Pakistan’s economy is Rs. 113.93 trillion (USD 407.9 billion). The per capita income currently stands at Rs. 506,736 (USD 1,814), though this will be revised once new population census projections are finalised.