Greek debt and weak Euro to smash IT market

Forrester predicts European IT market contraction this year, but northern countries will still deliver "fast growth"

Greece is the word: the impact of the Greek crisis will hurt the European IT market this year

The European IT market is set to lag behind the rest of the world this year as the weak euro and the Greek debt crisis hamper growth.

Forrester Research projects worldwide IT spending will grow 7.8 per cent annually in 2010 to almost $2.5tn (£1.6tn). But the stuttering currency and the impact of Greece's economic woes has seen the analyst slash its growth forecast for central and western Europe.

Just three months ago, Forrester was predicting 2010 growth of seven per cent for the region. Now the market is facing a 0.7 per cent contraction, when measured in US dollars. Measured in euros, the picture looks a little brighter, with the market still set to grow to the tune of 4.1 per cent.

Unsurprisingly, southern Europe will be worst hit. Contractions in this part of the region will be offset to an extent by "fast growth" in northern Europe, claimed Forrester.

Measured in euros, computer equipment will be the fastest growing area of the western and central European market, with spending projected to increase 7.4 per cent this year. The software market is set for 4.6 per cent growth, while comms hardware spending is forecast to grow 3.4 per cent and the IT outsourcing space is expected to expand 3.2 per cent. Systems integration services will enjoy a more modest 1.7 per cent hike in market worth.