The volume of IT services exports from Ukraine in the first quarter of 2023 decreased by 16 percent year-on-year to $1.68 billion, the IT Ukraine Association said in a press release on Friday.
It pointed out that for January-December 2022, IT services exports increased by $400 million compared to 2021, to $7.35 billion.
“This decline (in Q1-2023) is due to two factors: first – in previous years, the industry grew at an ultra-high rate, and second – each first quarter of a new year traditionally has a decline compared to the first quarter of the previous year. However, the results of the quarterly exports of IT-services from Ukraine in 2022-2023 show that now the industry has entered into a “flat”, that is, growth has stopped and a significant decline has not begun, “- a comment from the executive director of the Association IT Ukraine Konstantin Vasyuk said in a press release.
According to the Association, in the fourth quarter of 2021, exports of IT services from Ukraine amounted to $ 2.11 billion, in the first quarter of 2022 – $ 2 billion, in the second quarter – $ 1.74 billion, in the third quarter – $ 1.74 billion, in the fourth quarter – $ 1.87 billion. At the same time, the first quarter 2023 export figure is higher than any first quarter figure since 2014, when it was only $0.34 billion. Even in Q1 2021, the figure was lower than the current $1.44 billion. It was only surpassed in Q1 2022 at $2 billion.
It is reported that according to the Association’s observations, which are based on data from the National Bank (NBU), a similar situation took place in 2014, when the IT-sector also showed a drop of 26% and held positions $350-400 million quarterly. However, in 2016, the IT-sector resumed growth and until 2022 was adding 20% annually.
With reference to the NBU data, the IT Ukraine Association reports that IT services account for 43% of total services exports from Ukraine in the first quarter of 2023.
Ukraine has increased exports of IT services in 2019 by 30.2%, to $4.17 billion, according to a posting on the website of the IT Ukraine association, referring to data of Ukraine’s balance of payment.
“The export of computer services in 2019 increased 30.2% compared to the previous year and amounted to $4.17 billion. Accordingly, the amount of taxes and duties paid to the national budget of Ukraine increased by 28% and amounts to UAH 16.7 billion (an increase of 28.5%),” the association said.
The IT Ukraine association said that, in fact, taxes on the export of IT services for 2019 can cover a third (32%) of the national budget of Ukraine for education for the specified year.
“IT export grows by 20-25% annually. To maintain the current growth rate amid fierce global competition for talents, first of all, we need a balanced government approach to reviewing existing tax models and developing IT education,” Executive Director of IT Ukraine Association Kostiantyn Vasiuk said.
According to IT Ukraine, the growth factor of Ukrainian IT exports is, first of all, the high demand of the global market for IT solutions and the preservation of the contract model in the interaction between companies and IT specialists.
The IT Ukraine Association was founded in 2004. The association includes export IT companies that develop software and products with a total staff of more than 160,000 employees, which together account for 50% of the industry’s total revenue in Ukraine.
The IT Ukraine Association is the silver sponsor of the Ukraine House.
