The Ukrainian IT industry lost US$199 million in revenue in the second and third quarters of 2020 has it had been hit by the COVID-19 pandemic and quarantine-related curbs.
This is seen from findings of a study conducted by the Better Regulation Delivery Office (BRDO).
The main factors include: reduced demand for services due to the financial problems of customers; the inability of workers to perform their duties due to illness; reduced productivity due to quarantine restrictions.
IT exports from Ukraine
What is more, exports of Ukrainian IT services have shown positive dynamics over the past nine years. However, the growth rate slowed in the second quarter and became the lowest one since 2014. According to preliminary data of the NBU, the figures for the third quarter indicate a partial recovery of export growth rates.
In general, continued export growth (even with declining growth rates) is a very positive result, given some negative forecasts of the COVID-19 pandemic impact.
The optimistic scenario assumes that the negative pandemic impact on the IT services export volume will be reported for the second and third quarters. The export growth rates will return to 25.8% in the fourth quarter as it was in 2016-2019. As a result, exports will amount to US$1.5 billion in the fourth quarter and US$5.1 billion for the year. That is, it will increase by 23%.
The pessimistic scenario assumes that the negative pandemic impact will continue in the fourth quarter. Therefore the decline will continue and will be 2% for the previous quarter. As a result, exports will amount to US$1.2 billion in the fourth quarter and US$4.6 billion for the year. That is, it will increase by 11%.
"We consider the preserved traditional seasonality for the industry (the increase by 14% for the third quarter in 2016-2019, but with a decreasing ratio based on the second and third quarters) as a realistic scenario," the study said. As a result, export volumes will amount to US$1.3 billion in the fourth quarter and US$4.9 billion for the year. That is, it will increase by 19%.