Slow US economy, challenges in BFSI sector may drag IT firms in FY21

Slower growth in US economy, challenges in financial services sector may result in lower client spend

A deceleration in gross domestic product (GDP) growth of the US, coupled with slowdown in the banking financial services and insurance (BFSI) sector across Europe, is likely to drag growth of the IT services industry in the next financial year. 

While it may not be a major slowdown, experts believe that these factors could adversely impact client spend as well as deal flow.

In a recent report, analysts Nitin Padnabhan and Hiral Shah from Investec Securities noted that unlike FY19, when the US’ GDP was growing despite sectoral headwinds, FY20 growth levers are not the same and could directly impact Indian IT