OREANDA-NEWS. RnR Market Research Offers Report by Research on Venezuela Information Technology Report Q4 2016.

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 2016 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 64.6% over 2016-2020.

- Computer Hardware Sales: From VEF12.0bn in 2016 to VEF83.4bn in 2020, at a CAGR of 62.5%. Reduced demand for both imports and domestically-assembled PCs as price rises rapidly eroded affordability.

- Software Sales: From VEF3.8bn in 2016 to VEF30.3bn in 2020, at a CAGR of 67.8%. All but essential spending deferred in the short term, and over the medium term brain drain, piracy and weak enterprise investment will all be drags on spending growth.

- IT Services Sales: From VEF3.4bn in 2016 to VEF27.4bn in 2020, at CAGR of 68.2%. 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.