Forrester has announced a downward revision of its 2025 technology spending forecast for the Asia Pacific (APAC) region due to evolving tariff negotiations. Initially, Forrester projected a 6.5% growth in tech spending, reaching $722 billion, up from $678 billion in 2024. However, the imposition of broad-based tariffs by the US is expected to increase technology costs and disrupt supply chains, potentially reducing growth by 1 to 2 percentage points.
Despite these challenges, the adoption of artificial intelligence (AI) and cloud technologies is anticipated to continue driving robust growth in software and IT services across Asia. Countries like India and Vietnam, initially expected to see tech spending grow by 11% and 10% respectively, may experience a slight dip but are still projected to outperform the regional average. The software market is set to grow by 10.4% in 2025, with AI and cloud services dominating demand, particularly in Southeast Asian economies.
Frederic Giron, VP and senior research director at Forrester, noted, “Asia Pacific’s tech spending growth continues to demonstrate the region’s commitment to leveraging technology to build resilience and drive innovation in an uncertain global climate.” However, he cautioned that the new tariffs are likely to influence the pace and prioritisation of technology initiatives.
Forrester’s projections for 2025 include a 6.6% growth in Australia, 7.7% in China, 11% in India, and 5.6% in Singapore, with Southeast Asia also showing strong growth. Business and tech leaders are advised to engage in comprehensive scenario planning to navigate these economic headwinds effectively.
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