Asia will get steady growth next year, defying global headwinds, says Mastercard’s chief APAC economist

“The actual contributions to global growth come more from the Asia-Pacific region than they do from the Americas or Europe,” says David Mann, Mastercard’s chief APAC economist, in an interview with Fortune. 

Mann credits plentiful investment, particularly in technology and infrastructure associated with the AI buildout, for Asia’s resilient growth. He adds that the APAC region is unique as three-quarters of its foreign direct investment comes from the rest of the region, rather than from non-Asian sources. 

With the U.S. being an increasingly unreliable trade partner, Asian countries are looking to build supply chains with their neighbors. “Even more investment is going into other markets around the region, from China, to Japan and South Korea, to help expand supply chains and capacity in multiple markets for diversification,” says Mann. 

Uneven growth in ASEAN

The Mastercard Economics Institute predicts that growth trajectories will diverge in Southeast Asia next year. Among the ASEAN-5 nations (the five founding and largest economies of the Association of Southeast Asian Nations), Indonesia and the Philippines will expand steadily, while growth moderates in Malaysia, Singapore, and Thailand.

“We think that there will be some support in Indonesia, from fiscal policy and investment expansion,” Mann says, adding that he predicts “steady growth” (5% real GDP growth) in Southeast Asia’s most populous country.

In the Philippines, multiple one-off shocks in 2025 have led analysts to predict stronger growth rates in 2026, due to more moderate growth this year.

Thailand, on the other hand, is going through a “softer patch”, with Mann calling it one of the slower-growing economies in the region.

MEI predicts real GDP growth in Thailand to slow to 1.8% in 2026. The country faces “relatively large” demographic challenge, Mann adds, pointing to the country’s rapid transition into a super-aged society due to its record-low birth rates.

The rising middle class

Yet, Mann argues that there are reasons to be optimistic about Southeast Asia’s growth.

“ASEAN itself is a big, significant global player, even compared to Eastern Europe, Western Europe, Latin America and the EMEA region,” he says. “It’s a significant region that has still got a rising middle class and urbanization story, especially in places like Vietnam.”

The young region’s growing affluence will also increase consumer spending, further spurring growth. Southeast Asia’s relatively young, digitally-savvy demographic also provides a steady flow of customers chasing the latest consumer trends. 

“If you’re producing in Indonesia, you would be selling there as well, because it’s such a huge market—over 40% of the ASEAN populace is in Indonesia itself,” says Mann. 

A richer demographic is also likely to travel more. “As you get more and more people becoming more affluent, they’re moving beyond just buying stuff to going for experiences—and travel is at the top of that list,” says Mann.

The resurgence of tourism after the pandemic is also a boon for Southeast Asia, a popular travel destination for regional and global tourists alike. In 2025, Thailand especially saw a surge in tourists, following the release of the third season of hit HBO TV series, The White Lotus, which was filmed in various Thai cities including Koh Samui, Phuket and Bangkok.

Globally, alternative destinations (or destination dupes) have also grown increasingly popular, as  travelers seek out the path less trodden. “That means that you can see even more places opening up where you get tourists going in—where they’d never been before,” Mann explains. This would spur job creation and infrastructure investment, and spread the economic gains from tourism over different regions of the country.

“In places like Thailand or Malaysia, we have seen an increased dispersion of the share of spending. It used to be that the top five destinations had the lion’s share of all the spending in the country by tourists—and that has been going down steadily year after year,” Mann says.