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The global IT and business services market is expected to grow by 5.6 per cent in 2022, representing an increase of 160 basis points from 2021 forecast, according to IDC.

The market will continue to expand throughout the next few years at a rate of 4-5 per cent, representing an overall increase of 40 to 80 basis points each year, pushing the market's long-term growth rate to 4.6 per cent.

Asia-Pacific's growth outlook improved by 0.9 percentage points in 2022, largely due to China and other developed Asian markets like Australia, Japan, Singapore and South Korea.

"The improved market view reflects robust 2021 bookings and pipelines by several large services providers, an improved economic outlook (compared to the previous forecast cycle), and inflationary impact on the services market, offset slightly by the negative impact of the Ukraine/Russia conflict," the report noted.

The Americas services market is forecast to grow by 5.3 per cent in 2022, up 150 basis points from the October 2021 forecast, owing to a faster economic rebound and the impact of inflation.

"While Europe is the most impacted region by the ongoing Ukraine/Russia conflict, we remain sanguine on the region," it added.

However, Russian and Ukrainian markets will shrink significantly this year.

The Middle East & Africa (MEA) growth prospects for 2022 and 2023 have also been raised by 250 and 100 basis points, respectively.

Within the IT and business services markets and across all regions, cloud-related services spending has been the main growth accelerator since 2020.

IDC forecasts it to continue to grow close to 20 per cent year over year in 2022 and between 15 per cent to 20 per cent over the next three years.

Overall, while inflation may artificially boost market size in the short-term, this is largely offset by demand instability and rising labour costs.