Boston, MA -- (SBWIRE) -- 12/27/2012 -- BMI View: BMI has upwardly revised its Venezuela IT forecast but there remain downside risks due to macroeconomic factors. The precarious business environment will inhibit enterprise IT investment while consumers face inflationary pressures and the resulting erosion of real wages. Meanwhile our forecast also takes account of the threat of a further devaluation of the bolivar. Venezuela is one of the smaller markets in its region, but a PC penetration rate of less than 12% indicates the underlying potential for growth. In 2012, Government PC programmes will boost sales, although most units will be procured locally. There are areas of opportunity with continued investment by small and medium-sized enterprises, due in part to a government tax subsidy, and spending by the energy, retail and financial services sectors.

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Headline Expenditure Projections

Computer hardware sales: US$1.2bn in 2011 to US$1.3bn in 2012, +9% in US dollar terms. Forecast in US dollar terms upwardly revised due to macroeconomic factors. Given a difficult trading context, the main long-term sales driver is greater affordability, partly as a result of cheap computer programmes, while the PCs for schools programmes is another market driver.

Software sales: US$316mn in 2011 to US$357mn in 2012, +13% in US dollar terms. Forecast in US dollar terms upwardly revised due to analyst modification but the government's commitment to open source software will constrain opportunities for proprietary software vendors.

IT Services sales: US$275mn in 2011 to US$311mn in 2012, +13% in US dollar terms. Forecast in US dollar terms upwardly revised. About 75% of demand will come from the large company sector, with the oil sector still significant, despite the fall in oil prices.

Business Environment Rating

Venezuela's score was 49.2 out of 100.0, with the country's unchanged last place in our rankings reflecting our judgement that the economic situation and business environment in the country are unfavourable for IT spending growth.

Key Trends & Developments

- Uncertainty about the outcome of the 2012 general election, and the possibility of a further devaluation of the bolivar after the election, will cloud Venezuela's IT investment outlook this year. However, Venezuelan computer shipments should record positive growth in 2012, due partly to the government's affordable computer programmes, computers for education and more local production of inexpensive computers. Around 500,000 notebooks are expected to be procured for schools this year, as the government's 'Va a mi Casa' digital classrooms programme is expanded to secondary schools.

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