Gulf IT spending to grow 12% annually

Government spending to continue to drive Gulf IT market says AT Kearney

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By  Dylan Bowman Published  October 22, 2008

Spending on IT in the Gulf is set to grow at an annual rate of 12% and above over the next five years despite the global economic downturn, according to consultancy AT Kearney.

Analyst Dan Starta said growth is being driven by massive government spending fuelled by record oil revenues. AT Kearney is due to publish a white paper, commissioned by Dubai Internet City, on the state of the regional IT industry today

Starta said the biggest growth sectors are the telecoms, finance and government sectors, in which IT spend is predicted to grow annually by 15%, 14%and 13% respectively.

The most attractive market for IT companies is Saudi Arabia, followed by the United Arab Emirates, he said.

Starta said record oil revenues meant governments and companies in the region have not been hit by the credit crunch in the same way as those in other regions, and that there is still a lot of money available to be invested in IT.

“I wouldn’t necessarily say [the Gulf] is immune from the global issues that are going on, but the sources of funding for IT projects remain,” Starta said.

He said government projects and companies are still relatively young, which means there is still a lot more investment to be made, that will drive growth in IT spend.

“If you look at where there big projects are from a governmental perspective and where the companies are from a maturity perspective, they are at the cusp of really ramping up in the peak of their growth,” he said.

“So especially in the government, telecom and finance sectors I still don’t see much of a slowdown [in IT spend] yet,” he added.

The whitepaper, titled ‘The IT Market - A Middle East Perspective: An Overview of Business Opportunities for Innovative New Companies’, will be launched at a gala dinner today.

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