The COVID-19 pandemic has dealt a devastating blow to Latin America’s IT services industry, and Mexico is the worst hit, according to research firm IDC.
Because of the economic crisis resulted from the pandemic, the region is likely to see a sharp drop in IT investment by as much as US$15 billion.
With the financial market in turmoil, businesses of all stripes are likely to reduce their IT budget in the months to come.
The estimates were outlined at an internet presentation by IDC analysts, according to the Spanish news portal El Universal.
IT spending is likely to plummet considerably in Brazil, Colombia, and Peru as well. Brazil, Latin America’s biggest economy, is predicted to see around a 4% drop in IT spending, compared to previous estimates of over 5%.
Chile, where technology spending was expected to hit 13%, is now facing the prospect of seeing the investment decline to 2.5%. The story of Argentina is much the same. IDC had previously predicted that Argentina would see its IT spending to increase 16% this year. Now, the research firm is forecasting a growth of a mere 1%.
However, some IT services companies may rebound quickly and register tremendous growth in revenue next year if the governments in the region support the industry at this moment of crisis due to COVID-19, the research firm said.
The research firm says the economic damage caused by the virus varies from country to country, depending on the action taken by the government.