Abenomics and tech spends for APAC

By : |July 16, 2013 0

SINGAPORE: Asia Pacific’s growth rate of 4.3 per cent in 2013 in local currency terms is hampered by slowing growth in China and India but offset by improvements in Australia, Japan, and South Korea, according to Forrester Research’s latest global ICT spending forecast.

The report projects a sharp drop in the value of the yen against the US dollar – a side effect or, perhaps, an intended main result of Abenomics – means that the Asia Pacific tech market will actually decline by 3.2 per cent when measured in US dollars.

Forrester’s global ICT spending outlook (in dollars) expects a 2.3 per cent growth in 2013, down from the 3.3 per cent forecast in January, and stronger growth of 5.4 per cent in 2014. The continued recession in Europe and slowing growth in China will offset improvements in the US, Japan, and some emerging markets. The strong US dollar is keeping US dollar growth rates two percentage points or so below those in local currencies.

In general, CIOs will focus their biggest spending increases on software, where growth globally will be 5.7 per cent (in local currency terms) in 2013 and 7.3 per cent in 2014. New technologies like SaaS apps, mobile devices and tablets, analytics and big data, and smart process apps are growing at double-digit rates — primarily in the Tech Twelve countries.

As per analysts, tech spending growth will be faster in India. India’s growth of 5.8 per cent in 2013 won’t be as weak as in 2012 but will still fall short of its 2010 and 2011 growth rates. “CIOs in India can start to get ready for a slightly higher pace of tech buying than was appropriate during India’s slowdown in 2011 and 2012,” Forrester analyst Andrew Bartels noted in an analysis.

By 2014, India (and China) should start to improve, offsetting slower growth in Japan, resulting in growth of 5.1 per cent in local currencies and 3.7 per cent in US dollars.


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