HONG KONG: Advertising expenditure levels will rise by more than 5% in Asia Pacific this year, Media Partners Asia, the consultancy, has forecast.

In a new report, the company argued a favourable macroeconomic environment would drive growth in advertising spend in the region in 2010.

More specifically, China and India are both expected to see their GDP expand by between 8% and 10% in each of the next two years.

Countries in South-East Asia, like the Philippines and Malaysia, should also enjoy economic growth in the 5% to 6% range in this period, with Hong Kong and Taiwan recording increases of around 5%.

The improved fiscal climate will lead to a "rebound in earnings" for media owners and encourage them to investment in the new content and technology they need to "stay ahead", MPA predicted.

Overall, the company suggested that advertising revenue levels across Asia Pacific would climb by 5.8% in 2010, having declined by 4.1% in 2009.

Within this, China and India should both see totals rise by at least 11%, a figure that stands at 9% in Korea and 5% in Australia.

Trading conditions elsewhere will be broadly positive, but the nuances of specific markets will have a role to play, Vivek Couto, the executive director of MPA, said.

"With the notable exception of Thailand, the level of media growth and resilience in Southeast Asia is impressive," he argued.

"TV is a notable beneficiary in markets such as the Philippines, Malaysia, Indonesia and Vietnam."

Events such as the World Cup will help stimulate demand among brand owners, but internal developments in many nations will also contribute to this process.

"In markets such as the Philippines and Indonesia, media owners are beginning to realise earnings momentum, as net advertising volume reaches a significant scale," said Couto.

"The only threat remains competition, which leads to severe rate-card discounting."

Data sourced from Media Partners Asia; additional content by Warc staff