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IDC: Global IT Spending Slowdown Blamed On China

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The economic slowdown in China has driven IDC to lower its expectations for worldwide IT spending growth this year.

IDC now forecasts IT spending growth of 4.6% in constant currency for 2013, down from the previous forecast of 4.9% growth and a sharp deceleration from last year's growth of almost 6%. Despite the lower forecast, IDC expects IT spending will reach USD2 trillion for the first time ever in 2013. Meanwhile, total ICT spending, including telecommunications services, will increase by 3.8% at constant currency to USD3.6 trillion.

Capital spending in China and other emerging markets shows signs of weakening from the rapid pace of expansion recorded since 2010. Meanwhile, PC sales face continued pressure from lower-cost tablets in the first half of 2013 and the rapid adoption of cloud services is cannibalizing revenue from traditional sales of software and IT services.

The slowdown in the Chinese economy was a drag on IT spending in the first half of this year. IDC now forecasts overall IT spending growth of 9.5% in China this year, still slightly outpacing GDP but down from the previous forecast of 12.9% growth and a sharp deceleration from the pace of the past four years.

Meanwhile, the upturn in Japanese stock market confidence, driven by the new government's deflation-busting policies, has yet to materialize in a major upturn in IT spending. IDC now expects overall IT spending in Japan to decline by almost 1% this year in constant currency, after the post-earthquake stimulus recovery, which drove growth of almost 5% last year.

For the overall Asia Pacific region, IT spending is now expected to increase by just 4.8% in constant currency this year, down from the previous forecast of 6.3%.

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