Asia Pacific technology spend to rise 9.3% in 2026

Asia Pacific technology spending will rise 9.3% in 2026 to USD $874 billion, according to Forrester. Inflation and geopolitical risk are expected to erode the real value of that growth.

The region is projected to spend more than USD $437 billion on new technology between 2025 and 2030. Software, services, communications equipment and technology outsourcing will drive headline growth, while higher software prices, hardware cost spikes, tariffs, energy shocks and regulatory differences weigh on purchasing power.

Computer equipment is expected to post the fastest growth in the region, at 13.7%, reflecting spending on AI-optimised data centres by hyperscalers and higher hardware prices linked to global component shortages.

Software spending is forecast to grow 10.7% as adoption of agentic AI increases and vendors build AI features into renewal pricing.

Market split

Growth will not be uniform across the region. India is forecast to lead major Asia Pacific markets with technology spending growth of 13.4%, followed by China at 10.7%, Australia at 8.6% and Singapore at 6%.

Across Southeast Asia, growth is projected at 12.5% in Indonesia, 9.5% in Malaysia, 12.3% in the Philippines, 6.8% in Thailand and 15.4% in Vietnam. The region's digital economy has shifted from user acquisition to monetisation, with digital services income reaching USD $11 billion in 2024, 2.5 times the 2022 level.

Australia's technology spending is expected to reach nearly AUD $110 billion in 2026. Software prices there are rising at almost five times the pace of general inflation as vendors add AI features to contract renewals.

In China, AI infrastructure spending is projected to exceed USD $70 billion in 2026. Investment by Alibaba, ByteDance and the Ministry of Industry and Information Technology is supporting data centre and cloud platform buildout, although weak domestic demand and deflationary pressure are likely to restrain more traditional enterprise IT spending.

India's growth is being driven by cloud adoption and data localisation rules that are prompting onshore infrastructure investment. Domestic enterprise demand remains the main force behind the country's double-digit expansion.

Singapore's market is expected to be supported by AI transformation spending and hyperscaler expansion. A shortage of skilled workers remains the main brake on technology adoption, with many employers still behind in building an AI workforce.

Spending pressure

The forecast points to a widening gap between nominal spending growth and the practical impact of that investment. Chief Information Officers are dealing with talent shortages, volatile energy costs, uneven growth across markets and increasingly fragmented regulation.

Those pressures are especially relevant in markets exposed to energy supply disruptions or new sovereignty rules around data and infrastructure. Tariffs and shifts in global supply chains are also affecting hardware costs and planning assumptions for technology budgets.

Forrester linked part of the outlook to changing enterprise priorities as companies modernise systems around AI. That shift is lifting demand for data centre equipment and software, but it is also changing how suppliers price products and renewals.

Frederic Giron, Vice President and Senior Research Director at Forrester, said the headline figures did not tell the full story. "Asia Pacific's technology spending momentum remains strong, but the headline growth numbers mask a more complex reality," said Giron.

He outlined the operational and macroeconomic pressures facing the region.

"CIOs across the region are grappling with software inflation, hardware volatility, and increasing regulatory divergence that directly impact modernization plans. The conflict in the Middle East adds a new macro headwind - sustained energy cost inflation will compress GDP growth across oil-dependent countries in Asia. The CIOs in those markets should expect IT budgets to come under pressure if the conflict lengthens. To navigate this environment, leaders must shift to highly targeted investments - prioritizing automation, AI-enhanced platforms, and modernization initiatives that deliver measurable productivity gains," added Giron.