The Serbian IT market continued solid growth of 18.9% year on year in U.S. dollars in 2008, fueled by a growing economy, structural reforms, privatization, and inflow of foreign direct investment. However, IT market spending was, to some extent, impeded by parliamentary and presidential elections, leaving the IT market with a lower growth rate than it could have otherwise achieved. According to a recent IDC report, total spending on hardware, software, and IT services in Serbia reached almost $891 million in 2008. Measured in local currency, the market saw year-on-year growth of 12%, due in part to a weakening of the U.S. dollar.

“IT spending in Serbia is expected to decrease in 2009–2010 and to pick up again in the last three years of the forecast period. The downturn should be used for reinventing IT within companies, converting IT from a business service to a business transformer that offers a range of new business opportunities,” says Atila Madai, Country Manager, IDC Adriatics. “The average growth rate, however, will depend on vendors’ abilities to cope with economic crises facing the country.”

Posting $121 in IT spending per capita in 2008, Serbia seized 11.6% of the EU27 average ($914) – behind Slovenia ($494) and Croatia ($299), but ahead of neighboring Romania ($116). Nevertheless, Serbia captured 23.0% of the combined IT spending of the eight Adriatics regional countries in 2008, despite ranking below the $145 average IT spending per capita for the overall region.

IT equipment constituted 72.6% of the total value of Serbia’s IT market in 2008. IT services placed second, with approximately 16.7%, and software captured the remaining 10.7%.

IDC expects IT spending in Serbia to increase at an average annual rate of 11.6% over the five year forecast period, to surpass $1.54 billion in 2013.

“The global financial crisis will negatively impact Serbia’s IT market, and IDC expects that $1.37 billion – an amount larger than Serbia’s typical annual IT market value for one year – will be lost as a result in 2009–2012,” says Madai. “Major projects planned for 2009 will be on hold until the second half of 2010. New projects in 2009 will emerge only if they have a reasonable ROI in the short term.”

The IDC study Serbia IT Market 2009-2013 Forecast and 2008 Vendor Shares (IDC #ESQ11R9) presents the IT market in Serbia and forecasts total IT expenditures by technology through 2013. The study contains market size, vendor market shares, and growth projections for hardware and packaged software shipments, as well as for the provision of IT services.