BMI View: The economic crisis in 2014 had a major disruptive impact on the Argentine IT market, with thedevaluation of the peso, import restrictions, skyrocketing inflation, capital controls, shortage of credit andgovernment debt default all contributing to a recession. We estimate the IT market expanded in localcurrency terms, but contracted by 26% in US dollar terms. We expect another year of US dollar contractionin 2015 due to depreciation and inflation, but over the medium term the outlook is for a gradualimprovement in the economic environment, particularly from 2016/2017, which should see a return togrowth once confidence returns, with upside potential due to deferred purchases 2014-2015. Meanwhile,the impact of economic crisis was not wholly negative, with devaluation helping to make IT exports abroadmore competitive and boosting industry development. There are also positive fundamentals for mediumterm growth including increases in PC penetration, second device ownership, enterprise softwarepenetration and cloud computing are examples of sectors that have growth opportunities.
Headline Expenditure Projections
Computer Hardware Sales: ARS17.2bn in 2014 to ARS18.8bn in 2015, +9.7% in local currency. Furtherdepreciation will mean the hardware market continues to contract in US dollar terms, albeit with strongerperformance than in 2014.