Region set to witness 12% growth in IT spending

The Middle East and Africa region is expected to witness a 12 per cent growth in IT spending this year.

According to the industry tracker IDC, the region is forecast to bounce back and register impressive growth as against the 2.5 per cent decline in spending seen in 2009.

The regional growth will be complimented by a three per cent growth in global IT spending although the effects of global recession will be seen throughout the year.

"Despite pent-up demand for upgrades and new applications following the deep spending cuts of the past year, economic uncertainty will combine with capital and credit constraints to inhibit spending in mature economies," said Stephen Minton, Vice-President of Worldwide IT Markets and Strategies at IDC. "The engine of global industry growth in 2010 will be in emerging markets, in particular China and India, where IT spending will recover much more quickly."

Overall, IDC forecast that worldwide IT spending will reach $1.48 trillion (Dh5.43trn) in 2010, still below the $1.5trn recorded in 2008. "Following a decline in overall tech spending of 4.5 per cent at constant currency in 2009, IT spending will not fully recover from the global recession until sometime in 2011," said Minton.

IDC's forecast of three per cent growth in worldwide IT spending is at constant currency, and does not assume future fluctuations in the value of the US dollar or other international currencies over the next 12 months. If the US dollar weakens in 2010, the actual recorded growth of IT spending in the US dollar may be significantly higher. Measured in US dollars, worldwide IT spending declined by eight per cent in 2009 due to the stronger value of the currency compared to 2008.

On a global basis, IDC expects hardware spending to grow by five per cent in 2010, while software spending and IT services spending will grow by two per cent and three per cent, respectively.

In the hardware segment, worldwide PC spending is forecast to increase by three per cent this year, up from the previous forecast of two per cent growth, while the forecast for servers, storage, hardcopy peripherals and network equipment have also been raised. The outlook for software and services spending reflects the lower value of contracts signed in the past year and continued caution towards new project-based spending in mature economies.

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