Peru Information Technology Report Q3 2012

BMI View: Peru's IT market is forecast to increase to US$1.6bn in 2012, up by around 14%, with robust consumer demand and government spending lifting IT investment. 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.

BMI expects Peru's strong IT demand story to continue in 2012, driven by household spending, after private credit growth picked up strongly in January.

Headline Expenditure Projections Computer hardware sales: US$738mn in 2011 to US$822mn 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$166mn in 2011 to US$191mn in 2012, +15% in US dollar terms. Forecast in US dollar terms upwardly revised due to analyst modification with most current demand, in functional terms, being for enterprise resource planning (ERP) and supply chain management (SCM.)

IT Services sales: US$501mn in 2011 to US$589mn 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.

Risk/Reward Ratings: Peru's score was 54.9 out of 100.0. The Czech Republic ranked sixth in the Americas region in our latest RRR table, behind all its peers, except for Colombia and Venezuela.

Key Trends & Developments

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. Peru's Free Trade Agreement with the US has reduced tariffs by up to 80% and is continuing to fuel IT investments. Peru's appreciating exchange rate will also boost household's purchasing power.

Investment will be a key determinant of the strength of IT demand in 2012. Businesses appear 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 revenue, are expected to invest more in IT.