Despite increased geopolitical tensions and the impact of US tariffs, economic growth in the Asia-Pacific (Apac) region is expected to remain stable in 2026. According to a December report released by the Mastercard Economics Institute (MEI), real GDP growth in the region is expected to be 3.1% in 2026, practically stable compared to 3.2% in 2025.
“The actual contributions to global growth come more from the Asia-Pacific region than from the Americas or Europe,” says David Mann, Mastercard’s chief economist for Apac, in an interview with Fortune.
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Mann attributes the resilience of Asian growth to the robust volume of investments, especially in technology and infrastructure linked to the expansion of artificial intelligence. He adds that the APAC region is unique in that three-quarters of foreign direct investment comes from the regional bloc itself, rather than from sources outside Asia.
With the US becoming an increasingly unreliable trading partner, Asian countries are looking to build supply chains with their neighbors.
“More investments are going to other markets in the region, such as China, Japan and South Korea, to help expand supply chains and capacity in multiple markets, aiming for diversification,” says Mann.
Uneven growth in the region
Mastercard predicts that growth trajectories in Southeast Asia will diverge next year. Among Asean-5 countries (the five founding and largest economies of the Association of Southeast Asian Nations), Indonesia and the Philippines are expected to expand consistently, while growth slows in Malaysia, Singapore and Thailand.
“We believe there will be some support in Indonesia, coming from fiscal policy and investment expansion,” says Mann, adding that he foresees “stable growth” (5% real GDP growth) in the most populous country in Southeast Asia.
In the Philippines, several one-off shocks in 2025 led analysts to project stronger growth rates in 2026, due to a more moderate performance this year.
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Thailand, on the other hand, is going through a “weaker period”, with Mann classifying it as one of the region’s slowest-growing economies.
Mastercard forecasts Thailand’s real GDP growth to slow to 1.8% in 2026. The country faces a “relatively large” demographic challenge, Mann adds, pointing to the rapid transition to a super-aged society as birth rates have reached record lows.
Still, Mann argues that there is reason to be optimistic about Southeast Asia’s growth.
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“Asean itself is a large and relevant global actor, even when compared to Eastern Europe, Western Europe, Latin America and the Emea region (Europe, Middle East and Africa)“, he states. “It is a significant region that still has a growing middle class and an ongoing urbanization process, especially in places like Vietnam.”
The greater prosperity of this young region will also increase consumer spending, further boosting growth. Southeast Asia’s relatively young and digitally connected demographic offers a steady stream of consumers looking for the latest trends.
“If you produce in Indonesia, you will also sell there, because it is a huge market — more than 40% of the Asean population is in Indonesia itself,” says Mann.
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A richer population also tends to travel more. “As more people become more prosperous, they move beyond just buying things to seeking out experiences — and travel is at the top of that list,” says Mann.
The resumption of tourism after the pandemic is also a boost for Southeast Asia, a popular destination for both regional and global tourists.
In 2025, Thailand in particular saw a jump in visitor numbers following the release of the third season of the hit HBO series The White Lotus, filmed in several Thai cities including Koh Samui, Phuket and Bangkok.
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Globally, alternative destinations have also gained popularity as travelers seek less obvious paths.
“That means you might see even more places opening up to welcome tourists — where they’ve never been before,” explains Mann.
This would boost job creation and investment in infrastructure, as well as spreading the economic gains from tourism across different regions of the country.
“In places like Thailand or Malaysia, we saw a greater dispersion in the share of spending. Previously, the top five destinations concentrated the majority of all tourism spending in the country — and this has been falling steadily year after year,” says Mann.
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