Global tech spending may see modest growth next year

Global technology spending is expected to “moderate” due to high inflation and fears of a recession in markets such as the United States, although it would still see an 11% increase in 2023, according to a report by IT sector experts.

A survey of 600 global companies from the Global 2000 shows that project budgets will increase by 11% over the next year despite recession fears. Most large companies have decided on their annual technology budgets for the coming year by December or January.

The global slowdown is due to pressure on discretionary spending. Discretionary spending represents 15-20% of a typical annual IT budget, which will be under severe pressure. However, core IT services will continue. Many Indian companies operating in foreign countries in areas such as mortgage processing, automotive, etc. may have a tough time next year.

According to an ICICI Securities report published on November 23, a slowdown in demand for hyperscalers such as AWS, Microsoft Azure and Google Cloud and software/software-as-a-service vendors may affect IT services revenue growth.