Better growth prospects for IT market in Ukraine in 2011 - November 2010

In 2009 the decline of the Ukrainian IT market appeared to be much deeper than had been initially foreseen. Overall sales of computer hardware, software and IT services in the country dropped by almost 31% to UAH 10.8bn. Political instability and the overall economic crisis in Ukraine postponed the recovery of the demand for IT products and services till mid-2010, when the first sign of sales stabilisation appeared. Therefore this year the Ukrainian IT market is probably not going to show booming growth, while in 2011 it is quite realistic to expect fast recovery of private and corporate IT spending in the country.

In Ukraine, the economic and political crisis of 2009 had quite a strong negative impact on the development of the national IT market. Last year, the sales of IT products and services in the country declined by 31% to UAH 10.8bn, while in hard currency sales, the reduction reached 54.3%, from $2.97bn to $1.36bn. The Ukrainian corporate sector cut budgets by 30- 40% and limited its IT spending to the support of existing systems. Households also postponed the purchases of new personal computers due to the economic uncertainty and sharp price growth of imported hardware caused by devaluation of the Ukrainian hryvna. Finally, the public sector also cut IT development budgets, as government agencies were unable to finance retirement payments and salaries. In 2009, the financing of IT programmes in the public sector declined by half to UAH 301m.