Washington, United States. Escalating conflict in the Middle East is reshaping expectations for the global technology economy, according to IDC, which said the transmission of geopolitical shocks into IT spending is clear and measurable. The research firm said the key issue for technology leaders is not whether impacts will occur, but their depth, duration and derivative consequences.
Baseline scenario
In a recently published report, IDC said its baseline scenario assumes the conflict remains contained within weeks, with growth and recovery in the second half of the year.
Under that scenario, global IT spending growth in 2026 would remain near 10 per cent, with only modest disruption to enterprise investment plans overall. In the Middle East and Africa region, where devices account for a larger share of expenditure, growth would be closer to 5 per cent.
Downside risks
IDC warned that the risk of a downside scenario is increasing as energy markets react to instability. It said a recent oil price spike could mark the beginning of a broader macroeconomic slowdown being transmitted into technology demand.
If the conflict lasts up to three months, global IT market growth could fall by around one percentage point, while expansion in the Middle East and Africa would slow to roughly 3 to 4 per cent.
Energy market transmission
IDC said a more prolonged escalation beyond three months would introduce significantly greater downside risk through energy markets and inflation pressures.
The firm said energy prices remain the primary transmission channel into technology spending, with oil volatility quickly feeding into inflation expectations and operating costs.