Developing Telecoms | IDC: favourable economic factors fuel IT spending in Serbia in 2007

22 May 2012

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IDC: favourable economic factors fuel IT spending in Serbia in 2007

Wednesday, 05 November 2008 01:00

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The Serbian IT market increased 30% year on year in US Dollars in 2007, fueled by a growing economy, structural reforms, privatisation, tax cuts, and the inflow of foreign direct investment (FDI). According to a recent IDC study, total spending on hardware, software, and IT services in Serbia reached almost US$751 million in 2007. However, measured in local currency, the market saw modest year-on-year growth of 12%, due to weakening of the US Dollar.

"IDC expects IT spending in Serbia to grow dynamically in the midterm, albeit from a low base, driven by an expanding economy, structural reforms, FDI inflow, privatisation, the pace of the country's EU approach, and a few foreseen IT investment initiatives," said Atila Madai, research analyst, IDC Adriatics. "The average growth rate, however, will depend on vendors' ability to cope with political constraints facing the country."

With a per capita IT spending of US$102 in 2007, Serbia's spending was 11.5% of the EU27 average (US$886), behind Slovenia (US$455) and Croatia (US$276), close to Bulgaria (US$120), and slightly ahead of neighboring Romania (US$96). Nevertheless, Serbia took 22.5% of the combined IT spending of the eight Adriatic regional countries, and was just above the US$99 average IT spending per capita for the region overall in 2007.

IT equipment constituted 72.8% of the total value of Serbia's IT market in 2007. IT services placed second, with approximately 15.4%, and software took the remaining 11.8%.

IDC expects IT spending in Serbia to increase at an average annual rate of 15.3% over the next five years to surpass US$1.50 billion in 2012, with software expected to grow the fastest.

"Proceeding with the privatisation process, increasing FDI, and improving economic developments, nearly all end-user segments will be buying computers and equipment," said Atila Madai. "The majority of companies are still undergoing development processes and are trying to establish basic informatics structures, and this means potential for long-term development in the local IT market."

The study presents the IT market as it stands in and forecasts total IT expenditure by technology through 2012. The study also contains market size, vendor market shares, and growth projections for hardware and packaged software shipments, and for the provision of IT services.

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