The Romanian IT market is expected to experience a slowdown in 2009, due to the economic situation, with market growth falling short of the 12% estimated for 2008, which itself represented a considerable slowdown on 2007. In the medium-term, however, the market's strong fundamentals of low computer penetration, rising incomes and the effects of EU membership, should underpin continued expansion. BMI forecasts a market CAGR of 12% for 2008-2013. IT spending continued to grow quite robustly in H108, despite fears about tightening consumer credit and eurozone slowdown. Towards the end of the year however, many vendors became increasingly pessimistic about the prospects for 2009, as there were signs of deteriorating business and consumer sentiment In the medium-term, Romania is probably better placed than many other markets to withstand the global economic headwinds. The fundamentals of low computer penetration, rising incomes, and the effects of EU membership should underpin continued expansion going forward. Wider economic reform and privatisation should be another factor driving spending. Industry Developments The Romania government is looking to EU structural funds to prevent stagnation in the domestic ICT sector and stimulate investment. According to the Ministry of Communications and Information Technology (MCIT), foreign investment will decline on 2008 levels, but the government has pledged to help companies who wish to invest to benefit from EU structural funds. In 2008, foreign investment in the ICT sector was expected to be around 8bn euros. The Ministry of Communications and IT (MCIT) has outlined key areas for ICT-related EU structural funds. The funds earmarked for Romania's ICT sector for the 2007-2013 period have been confirmed at around EUR383mn. Around 70% of the money earmarked for MCIT is to expand broadband communications infrastructure, but the government has identified some priority groups. The government is particularly keen to help small- and medium-sized enterprises (SMEs) have easier access to EU ICT programmes. In Q408, the government revealed that state aid worth EUR38mn would potentially be made available to SMEs by2013, for IT projects. The funds are to be distributed under the 'e-Growth!' initiative, which is part of the 'Knowledge-Based Economy' programme part-funded by the World Bank.
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