Currency swing to pull down global IT spending by 5.5 %: Gartner

July 04, 2015 10:38 pm | Updated 10:38 pm IST - BENGALURU

With the growing currency fluctuation, global IT spending is likely to witness a steep drop in 2015 against the previous year, says a forecast by technology advisory firm Gartner.

The technology research firm also said IT spending would decline than anticipated earlier this year.

According to a latest report from Gartner, worldwide information technology spending will decline by 5.5 per cent as against in 2014, and total spending is expected to be around $3.5 trillion in 2015. In constant-currency terms, the market is projected to grow 2.5 per cent. Gartner attributed the decline to the rising U.S. dollar.

Earlier, in its previous forecast in April, Gartner had said IT spending would decline 1.3 per cent in the U.S. dollars and grow 3.1 per cent in constant currency.

“We want to stress that this is not a market crash. Such are the illusions that large swings in the value of the U.S. dollar versus other currencies can create,” said John-David Lovelock, Research Vice-President at Gartner.

Secondary effects “However, there are secondary effects to the rising U.S. dollar. Vendors have to raise prices to protect costs and margins of their products, and enterprises and consumers will have to make new purchase decisions in light of the new prices,” he added.

The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets.

In its latest report, the advisory firm said communications services would continue to be the largest IT spending segment in 2015 with spending at nearly $1.5 trillion. However, this segment is also experiencing the strongest decline among the five IT sectors.

“Price erosion and competitive threats are preventing revenue growth in proportion to increasing use within most national markets,” stated the report.

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