Singapore – Technology spending across the Asia Pacific region is expected to grow by 9.3% in 2026, driven largely by investments in software, services, communications equipment, and tech outsourcing, according to a new forecast by Forrester.
The forecast estimates that the region will spend more than US$437b on acquiring new technology between 2025 and 2030. However, the research notes that rising costs, regulatory challenges, and macroeconomic pressures may limit the real impact of these investments.
According to the report, factors such as software price inflation, hardware cost spikes, regulatory fragmentation, tariffs, energy shocks, uneven regional growth, and talent shortages could weigh on the effectiveness of overall technology spending.
Among technology categories, computer equipment is projected to record the strongest growth at 13.7%. This increase is expected to be driven by hyperscalers investing in AI-optimised data centres and rising hardware prices linked to global component shortages. Software spending is forecast to grow by 10.7%, supported by the adoption of agentic AI and vendors incorporating AI-enabled features into renewal pricing.
The forecast also highlights varying levels of technology spending growth across key Asia Pacific markets in 2026.
In Australia, tech spending is expected to grow by 8.6%, reaching nearly A$110b (US$70.6 billion), exceeding the country’s projected GDP growth of 2.2%. Software prices are rising significantly as vendors integrate AI capabilities into contract renewals.
China is projected to see tech spending growth of 10.7%, with AI infrastructure investments expected to surpass US$70b. These investments are being driven by companies such as Alibaba and ByteDance, as well as the country’s Ministry of Industry and Information Technology through its industrial digitalisation initiatives. While data centre and cloud platform development remains strong, weak domestic demand and deflationary pressures may slow traditional enterprise IT spending.
In India, tech spending is forecast to grow by 13.4%, making it the fastest-growing market in the region. Growth is expected to be supported by rapid cloud adoption and data localisation regulations that are prompting investment in domestic infrastructure. Software spending is also rising as AI capabilities are embedded into vendor pricing models, while domestic enterprise demand continues to drive double-digit growth.
Technology spending in Singapore is projected to increase by 6%, supported by strong investments in AI transformation and expansion by hyperscalers. However, the report notes that a shortage of skilled talent remains a key constraint as many employers lag in developing AI-ready workforces.
Across Southeast Asia, technology spending growth is expected to remain strong. In 2026, spending is projected to grow by 12.5% in Indonesia, 9.5% in Malaysia, 12.3% in the Philippines, 6.8% in Thailand, and 15.4% in Vietnam.
According to the report, the region’s digital economy has shifted from a focus on user acquisition to monetisation, with digital services income reaching US$11b in 2024 — 2.5 times higher than in 2022. Developments such as cross-border QR payment interoperability and the continued adoption of Industry 4.0 across Indonesia, Vietnam, and Thailand are also contributing to digital transformation in the region.
“Asia Pacific’s technology spending momentum remains strong, but the headline growth numbers mask a more complex reality,” said Frederic Giron, VP and senior research director at Forrester. “CIOs across the region are grappling with software inflation, hardware volatility, and increasing regulatory divergence that directly impact modernisation plans.”
He added, “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 — prioritising automation, AI-enhanced platforms, and modernisation initiatives that deliver measurable productivity gains.”
