The annual economic outlook report for 2026, published by the Mastercard Economics Institute (MEI) on 11/12, provides a comprehensive view of 12 markets across Asia and Oceania. This report leverages a combination of public data, aggregated and anonymized Mastercard transaction data, and MEI's proprietary analytical models to estimate economic activity.

MEI analysts project the Asia-Pacific region will maintain stable growth through 2026. This stability comes as the global economy adapts to macroeconomic shifts, a surge in artificial intelligence (AI) investments, and evolving consumer trends. Globally, MEI forecasts real GDP growth for 2026 at 3,1%, a slight decrease from the estimated 3,2% for 2025.

Customers use Mastercard cards for purchases. Photo: Mastercard

The global economic outlook for 2026 is shaped by two parallel forces: risks and opportunities. Fiscal stimulus packages and technological advancements, particularly the integration of AI into business operations, are expected to generate additional growth momentum. However, the benefits from these drivers will vary across regions. Simultaneously, geopolitical tensions and ongoing supply chain restructuring continue to create disruptions, increasing uncertainty for trade and production.

Despite these challenges, MEI anticipates stable GDP growth in Asia-Pacific for 2026. Cooling inflation, supportive monetary policies, and improved real incomes in many markets are enhancing household living conditions, thus strengthening the region's stable foundation. Consumers continue to embrace technology, prioritize value, and favor spending on experiences like travel, while remaining cautious about essential costs. Both domestic and international tourism continue to be one of the region's important economic drivers.

David Mann, Mastercard's Chief Economist for Asia-Pacific, noted the region's clear resilience. He stated that the outlook for Asia-Pacific consumers remains positive, reflecting improved microeconomic conditions across many markets. Understanding and adapting to underlying demand trends will be crucial for businesses in 2026.

Key economic drivers in 2026

In the trade sector, MEI observes continued restructuring. Asia-Pacific maintains its central role in global supply chains, with India, ASEAN, and mainland China playing increasingly larger roles as capital and supply flows are reconfigured.

Alongside trade, AI and industrial policies are considered important growth drivers for the coming year. According to MEI's AI spending index, South Korea, Japan, India, and Hong Kong (China) lead the region in AI adoption among both businesses and consumers.

Experts also assess that various selective industrial and infrastructure policies, such as the development of AI hubs, data centers, smart cities, and investments in semiconductors, are laying the groundwork for the next phase of digitalization. Overall, these shifts are positioning Asia-Pacific to significantly benefit from the global productivity transformation driven by AI.

Tourism continues to be a sustainable growth driver for Asia-Pacific. In the first half of this year, Singapore's outbound tourism spending was 2,7 billion USD higher than in the same period of 2019. Indonesia and the Philippines led the region with increases in outbound tourism spending of 40% and 28%, respectively. International travel to Japan and some ASEAN countries has stabilized, while intra-regional tourism has expanded due to a preference for experiences. MEI notes that this trend highlights the resilience of the service sector and its leading role in the region's economic outlook.

Differentiated growth, consumption remains key

Regarding individual market outlooks, the consumer sector is expected to strengthen throughout the year. This momentum stems from anticipated interest rate cuts and targeted fiscal measures within upcoming 5-year plans. These policies are fostering the expansion of "new consumer" groups, including beauty, healthcare, lifestyle upgrades, and collectibles tied to fan communities.

Concurrently, the trend of "smart consumption" is becoming more pronounced, with consumers prioritizing quality and experience over solely focusing on low prices. This shift is reshaping retail operations and digital channels.

For the ASEAN-5 group, growth prospects are anticipated to be differentiated. Indonesia and the Philippines remain among the region's fastest-growing economies, at 5,0% and 5,6%, respectively. Meanwhile, Malaysia and Singapore are projected to return to more stable growth rates, at 4,2% and 2,2%. Thailand is expected to grow by 1,8%. Key risks include energy price volatility and shifts in global demand, which could impact labor markets.

In Australia and New Zealand, easing cost pressures and a trend of declining interest rates are expected to boost household spending. Experiential spending continues to drive recovery, as consumers prioritize travel, leisure, and accessible entertainment activities.

Across the region, small and medium-sized enterprises (SMEs) are accelerating the adoption of digital tools and online channels. This approach optimizes operations, expands customer reach, and enhances adaptability to global trade fluctuations.

David Mann noted that while Asia-Pacific's overall outlook is positive, the region still faces several risks in 2026. These factors include trade fragmentation, external shocks, and disparities in technological progress. According to Mann, how these challenges are addressed will determine the next phase of growth. Adaptability, investment in digital capabilities, and embracing shifts in consumer demand will be key to success.

The Mastercard Economics Institute provides in-depth analysis and insights into global and local economic trends, based on advanced data analytics technology and Mastercard's proprietary data. Established in 2020, MEI supports businesses, governments, and policymakers through economic monitoring services and timely analyses on various topics such as consumer spending behavior, retail and travel trends, and key economic indicators at regional and global scales. With its strategic thought leadership content and specialized solutions, MEI offers valuable perspectives to support decision-making and foster sustainable global growth.

Hoang Dan

Other in-depth reports and analyses from MEI can be viewed here.