Forrester: Asia Pacific Tech Spending Expected To Grow 9.3% In 2026, But Rising Costs And Regulations Will Impact Real Growth

Escalating tech costs, volatile hardware markets, energy supply disruptions, and sovereignty mandates will erode purchasing power in the region

According to Forrester’s (Nasdaq: FORR) Asia Pacific Tech Market Forecast, 2026 To 2030, the region will spend over US$437 billion on acquiring new technology between 2025 and 2030. Forrester estimates that total spending on technology will grow by 9.3%, driven by investments in software, services, communications equipment, and tech outsourcing, but cost pressures (such as software inflation and hardware spikes), regulatory fragmentation, tariffs, energy shocks, uneven regional growth, and talent shortages will reduce the real impact of that investment.

Across Asia Pacific, computer equipment will see the strongest growth at 13.7%, boosted by hyperscalers’ investments in AI-optimized data centers and higher hardware prices tied to global component shortages. Software spending will grow 10.7%, with adoption of agentic AI accelerating and vendors incorporating AI-enhanced capabilities into renewal pricing.

In 2026, Forrester projects tech spend growth across countries in the Asia Pacific to be:

• 6% in Australia. Australia’s tech spending is forecast to reach nearly A$110 billion (US$70.6 million) in 2026, outpacing the country’s projected 2.2% GDP growth. Software prices are rising at nearly five times general inflation as vendors embed AI capabilities into contract renewals.

• 7% in China. China’s AI infrastructure spending will exceed US$70 billion in 2026, fueled by major investments from Alibaba and ByteDance as well as the Ministry of Industry and Information Technology’s industrial digitalization mandate. Data center and cloud platform buildout remain strong, but weak domestic demand and deflationary pressures will slow traditional enterprise IT spending.

• 4% in India. As Asia Pacific’s fastest-growing market, India is being propelled by rapid cloud adoption and data localization rules that are driving major onshore infrastructure investment. Software investment is also rising as vendors embed AI capabilities into renewal pricing, while domestic enterprise demand continues to be the primary driver of India’s double-digit tech spending growth.

• 6% in Singapore. Singapore’s growth is anchored to strong investment in AI transformation and hyperscaler expansion, but a significant talent shortage remains the main constraint on technology adoption as many employers continue to lag in developing their AI workforce.

• Strong in Southeast Asia. In 2026, tech spending will grow across Southeast Asia: 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 monetization, with digital services income reaching US$11 billion in 2024 — 2.5x higher than in 2022. Cross-border QR payment interoperability is accelerating financial digitization, while Industry 4.0 adoption continues to scale across Indonesia, Vietnam, and Thailand.

“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 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.”