APEC FORECASTS SLOWER REGIONAL GROWTH OF 2.6 PCT IN 2025

KUALA LUMPUR, May 15 (Bernama) -- Economic growth across the Asia-Pacific Economic Cooperation (APEC) region is projected to moderate to 2.6 per cent in 2025 and 2.7 per cent in 2026, marking a significant decline from the 3.6 per cent recorded in 2024, according to the latest report by the APEC Policy Support Unit.

The report attributes the downward revision to persistent policy uncertainties, particularly in trade and investment, which continue to weigh on the regional economy.

Despite these challenges, the report identifies an opportunity for member economies to strengthen cooperation and resilience by advancing structural reforms and maintaining open trade.

Economic and trade activity across APEC’s 21 member economies has notably slowed.

Export volume for 2025 is forecast to grow by just 0.4 per cent, while import volume is expected to edge up by only 0.1 per cent, and this represents a sharp drop from 2024, when export and import volumes rose by 5.7 per cent and 4.3 per cent, respectively.

APEC Policy Support Unit director Carlos Kuriyama said rising tariffs, retaliatory actions, suspended trade facilitation procedures, and an increase in non-tariff barriers are creating an increasingly challenging trade environment.

“This uncertainty is hurting business confidence and leading many firms to delay investments and new product launches until the situation becomes more predictable,” he said.

Kuriyama emphasised that rising protectionist measures and unfair trade practices, such as increased subsidies, have created an environment in which firms are pausing decision-making and holding back on cross-border activities.

“What worries us a lot is that all of these uncertainties could affect jobs,” he said.

The report also noted that financial markets have responded to the uncertainty.

The global volatility index spiked to 52 points in April, more than triple the 2023-2024 average, while gold surged to US$3,200 per troy ounce in early May as investors fled to safe-haven assets.

Meanwhile, the general government debt across APEC is projected to hit 110 per cent of gross domestic product (GDP) by 2030.

“At the same time, we are confronting long-term demographic shifts, including a shrinking workforce and an ageing population. The fiscal and structural stress is real,” the report said.

Despite these headwinds, the report underscores that the current moment presents a critical opportunity for economies to work together.

Kuriyama urged APEC economies to recommit to cooperation and stability.

He noted that restoring confidence in trade requires not only easing tensions but also expanding into new markets, strengthening supply chain resilience, and improving transparency of trade rules and procedures.

“This is not the time to retreat behind borders. This is the time to double down on cooperation.

“Through collective action, APEC economies can navigate uncertainty and lay the groundwork for a more resilient, prosperous future,” he added.

-- BERNAMA