Venezuela Information Technology Report Q2 2015
BMI View: The exchange rate reforms enacted in February 2015 are effectively a devaluation, and will have a negative impact on IT market growth in 2015. Additional economic challenges in 2015 include inflation forecast at almost 75% and GDP to contract by 3.6% in real terms. These add to the existing challenges posed by the policy environment in areas such as the promotion of local production, IP enforcement and the 2014 introduction of a fair-price law limiting operating margins to 30%. There are however opportunities even in this weak operating environment for vendors, particularly those willing to operate on longer time horizons. For instance, the low PC penetration and government programmes to boost sales should ensure volume growth in the PC market as the economic situation stabilises in the latter years of our forecast, and we believe local and regional vendors will be well-positioned to capitalise on opportunities presented by government and enterprise modernisation.
Headline Expenditure Projections
Computer Hardware Sales: From VEF7.1bn in 2014 to VEF10.7bn in 2015. Demand expected to contract by almost 30% in unit terms as high inflation and the devaluation of the bolívar reduce household spending power, while also raising the price of components required for local assembly.
Software Sales: From VEF2.0bn in 2014 to VEF3.2bn in 2015. High levels of - and lack of progress in reducing - software piracy indicate it will continue to be a drag on spending. Meanwhile, the government's commitment to open source software will limit opportunities for proprietary software vendors in both the retail and enterprise markets.
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