Venezuela Information Technology Report - Business Monitor International - Industry Reports

Venezuela Information Technology Report

Venezuela Information Technology Report - Business Monitor International - Industry Reports
Venezuela Information Technology Report
Published Sep 24, 2016
64 pages — Published Sep 24, 2016
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Abstract:

BMI View: Venezuela s IT market has contracted sharply in US dollar terms as a result of the severity of the economic crisis - with the new exchange rate regime and spiralling inflation contributing to product shortages and price rises far in excess of local wage growth. With economic activity losing even more momentum in ---- and households hit by shortages of even basic goods there will be no short term resumption of IT spending growth in USD terms. ...BMI View: Venezuela s IT market has contracted sharply in US dollar terms as a result of the severity of the economic crisis - with the new exchange rate regime and spiralling inflation contributing to product shortages and price rises far in excess of local wage growth. With economic activity losing even more momentum in ---- and households hit by shortages of even basic goods there will be no short term resumption of IT spending growth in USD terms. The nominal growth rate will however be sustained by domestic inflation, where we forecast an IT spending CAGR of --.- over ---------. ...IT Services Sales: From VEF-.-bn in ---- to VEF--.-bn in ----, at CAGR of --.- . An oil-centric economy means the IT services segment is underdeveloped, and while cost saving and flexibility offered should be positives; the outlook is also weak in this segment due to the depth of the crisis.

...Another year of steep declines in spending is envisaged for ---- while the economic crisis is so severe that consumers are using a large share of their time and disposable income simply to access basic goods. Reliable economic data are difficult to access for Venezuela, resulting in a high degree of uncertainty, but by any assessment the economy has virtually ground to a halt. We forecast inflation of --- , further bolivar weakness and we advise caution about the increased risk of default with the sustained low oil price. This is exacerbated by elevated political risk following opposition victory in the December ---- elections, but with President Maduro retaining control over many key areas of governance. The leading factors behind the downturn in Venezuela s IT market in ---- and extension of the trend of contraction are devaluation, inflation and GDP contraction. ...The shift from the Sicad to Simadi exchange rate for IT imports effectively quadrupled costs in local currency terms. Furthermore, the regulatory interventions of the government in several areas of the economy add to downside risk for vendors operating in Venezuela.

...Even before the exchange rate reform, international brands operating in the retail PC market were under the threat of the fair price law , limiting operating profits to -- of sales. In ----, the mobile handset market was affected by fair price interventions, and we caution that computer hardware vendors could also become the subject of greater political scrutiny in ---- as economic pressures intensify and the government looks to populist measures. ...

  
Source:
Document ID
1756-4786
Country
Industry
Industry
Format:
PDF Adobe Acrobat
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Business Monitor International - Industry Reports—Established in 1984, Business Monitor International is a leading online publisher of specialist business information on global emerging markets. Business Monitor's range of quarterly services covers political risk, finance, macroeconomic performance, outlook and forecast, industry sectors and the business operating environment. Each Industry Report has been researched at source, and features latest-available data covering production, sales, imports and exports; 5-year industry forecasts through end-2012; company rankings and competitive landscapes for multinational and local manufacturers and suppliers; and analysis of latest industry developments, trends and regulatory changes.

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MLA:
Business Monitor International - Industry Reports. "Venezuela Information Technology Report" Sep 24, 2016. Alacra Store. Dec 10, 2016. <http://www.alacrastore.com/storecontent/Business-Monitor-International-Industry-Reports/Venezuela-Information-Technology-Report-2026-380>
  
APA:
Business Monitor International - Industry Reports. (2016). Venezuela Information Technology Report Sep 24, 2016. New York, NY: Alacra Store. Retrieved Dec 10, 2016 from <http://www.alacrastore.com/storecontent/Business-Monitor-International-Industry-Reports/Venezuela-Information-Technology-Report-2026-380>
  
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