IDC said Hong Kong's IT market declined to be worth 2.52 billion US dollars in 2002, and the prospects for the market's revival remain bleak in 2003, forecasting it to grow just one percent this year to 2.54 billion dollars.

"The issue of the Severe Acute Respiratory Syndrome (SARS) and its economic impact will weight heavily upon Hong Kong's prospects in the second quarter of 2003," IDC said in a statement.

"In light of Hong Kong's weakened business climate there is a tendency for IT initiatives to be put on hold or downsized considerably," it said.

"Investments will tend to become more strategic and on a smaller scale, and harder to come by."

Piyush Singh, IDC Asia-Pacific managing director, said: "The various economic sectors are certainly linked to each other, hence an impact on the retail, travel, tourism, entertainment and events businesses due to SARS will have an impact on the overall economy and consequently on the IT markets.

"Overall, business transactions will also be impacted as companies curtail business travel to and from Hong Kong," he said.

IDC said retail purchases of personal computers, peripheral devices and software will be impacted indirectly in the short term.

SPACE.WIRE