Peru Information Technology Report Q2 2012

BMI View: Peru's IT market is forecast to increase to US$1.6bn in 2012, up by around 14%, with a robust economy and government spending lifting IT investment, despite some business environment concerns. Peru has one of the smaller IT markets in the Latin American region, but spending is projected to grow at a CAGR of 12% over the 2012-2016 period, making it one of the highest growth global IT markets. Despite strong growth in recent years, a PC penetration rate of around 20% indicates there is plenty of potential for further development.

Headline Expenditure Projections Computer hardware sales: US$731mn in 2011 to US$815mn in 2012, +11% in US dollar terms.

Forecast in US dollar terms upwardly revised due to macroeconomic factors and following a solid PC market performance in 2011.

Software sales: US$142mn in 2011 to US$164mn in 2012, +15% in US dollar terms. Forecast in US dollar terms unchanged with most current demand, in functional terms, being for enterprise resource planning (ERP) and supply chain management (SCM.)

IT Services sales: US$497mn in 2011 to US$584mn in 2012, +18% in US dollar terms. Forecast in US dollar terms upwardly revised due to macroeconomic factors as the growing level of investment in hardware and software solutions translates into demand for more sophisticated IT services.

Business Environment Rating: Peru's score was 55.7 out of 100.0. The Czech Republic ranked eighth in the Americas region in our latest BER table, behind all its peers except for Colombia. Despite the relatively small size of its market, the country's IT market score was higher than that of Argentina, but its overall ranking was dragged down a relatively low Country Structure score, reflecting that development has been constrained by poor infrastructure.

Key Trends & Developments.

Peru's Free Trade Agreement with the US has reduced tariffs by up to 80% and is continuing to fuel IT investments. In 2012, Peru's household PC segment will remain the main PC market driver, as Peruvian consumers become increasingly affluent, and forecast lower unemployment helps confidence.

Businesses appeared to have embarked on a new cycle of hardware upgrades and this should continue in

2012. The mining sector should be in the vanguard of private investment. However, uncertainty about President Humala's economic policies could act as a drag on business investment.

Government IT project spending should be maintained. Areas of opportunity could include health, pensions, tax and e-government projects, as well as affordable computer and other digital divide programmes. Local governments, which have money from mining and gas tax revenues, are expected to invest more in IT.