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Why LatAm’s ICT industry is taking a cautious view on 2023 investments

Bnamericas Published: Thursday, November 17, 2022

The Latin American ICT industry will continue to grow its investments in 2023 but it will not be a stellar year due to the difficult macroeconomic situation in the region and the global economy, according to an IDC analyst.

"It can't be said that there is optimism for 2023," the market research firm’s enterprise software analyst Pilar Cornejo told BNamericas.

“I met this week with many clients who indicate that they need to be cautious with investments,” Paulo Bonucci, SVP and general manager of Red Hat Latin America, told BNamericas.

“Today people are not so optimistic,” Jairo Guzmán, market director for Colombia's Internexa, a wholesale telecommunications operator, told BNamericas in a recent interview. Guzmán expects elections in various countries, high inflation, and the overall adverse economic environment to affect ICT investments.

"We are going to continue growing, but not in the same accelerated way as we did," said Bonucci regarding Red Hat's business outlook.

Dell is more bullish on the region and even on countries like Argentina, where annual inflation is running at more than 80%. Last month the technology firm said that demand had been sustained despite the economic difficulties.

Companies' IT budgets will remain at similar levels to 2022, especially those related to digitization and the creation of use cases that improve customer experiences, said Cornejo.

She also highlighted some segments with very favorable projections such as hybrid cloud and front-end applications as these are revenue-generating investments aimed at attracting and retaining customers.

Bonucci said that everything that has to do with operational efficiency becomes the focus of companies in adverse economic contexts.

In October, the UN's Eclac said it expects GDP growth of 3.2% for the region this year and then a slowdown to 1.4% in 2023.

Technology has become a key factor for the region's economies and the ICT market is likely to see an expansion in 2022-23 that is significantly higher than GDP growth, according to Cornejo.

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