News Karnataka
Saturday, August 13 2022
Finance

Consumer IT spending to slide further amid recession fears

Consumer IT spending to slide further amid recession fears
Photo Credit : IANS

Singapore: The consumer IT spending in the Asia-Pacific region, already taking the brunt in the ongoing tight market conditions, is set to further slide in 2023, depending on the severity of the economic slowdown, according to an IDC report.

The risk of recession worldwide has continued to rise amid increasing inflation and the expectation of a tightening monetary policy.

The rising inflation is driven by ongoing supply chain constraints, geopolitical tensions, growing food and energy prices, and early 2022 lockdowns in China.

The second-order impact of these disruptions on Asia-Pacific economies is now being felt, the report mentioned.

“One in two businesses in the region expect that IT cost price increase stemming from inflation will impact their spending plans for the rest of 2022,a said Vinay Gupta, Research Director, IT Spending Guides, IDC Asia/Pacific.

“If the situation persists, businesses will either delay projects or adjust spends to focus on strategic initiatives essential for future business functions and needs,” he added.

However, demand from enterprises and service providers for IT investments remains stable so far in Asia-Pacific.

Any further worsening of the financial situation will also impact enterprise and service providers’ spending.

Consumer IT spending (related to purchase of mobiles, tablets, PCs, wearables, and peripherals) slowed in the first half of 2022 because many device purchases have already happened in the last two years to enable work from home or online classes.

According to the report, the expectations were that 2022 would not be that great a year.

However, due to rising inflation, even the remaining growth prospect is taking a hit.

Enterprise IT spending has been stable as businesses continue to protect IT budgets in the short term, the report noted.

“Some capital spending is vulnerable along with investments in new projects because the focus will shift to keeping the lights on rather than putting money on new initiatives,” it added.

However, the willingness and ability to increase IT budgets in line with rising prices is more uncertain today.

Read more:

US inflation at record high as WPI, CPI indices soar

Greece’s inflation hits 30-year record high in June

Nicosia: Cyprus inflation hits 40-year record in June

Inflation in S.Korea rises to 24-yr high

Turkey’s inflation hits two-decade high

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