The Asia-Pacific Economic Cooperation (APEC) is expected to maintain stable economic growth, demonstrating resilience in the face of uncertainty and ongoing challenges.
According to the August update of the APEC Regional Trends Analysis, the region's GDP is expected to grow by 3.5% in 2024, consistent with the growth rate observed in 2023.
The forum of 21 Asia-Pacific economies — which consists of the United States, Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, Philippines, Russia, Singapore, Chinese Taipei, Thailand, and Vietnam — however, will see a slight deceleration in 2025, with growth expected to ease to 3.1%, marking an improvement from earlier projections in May of 2.9%.
"While growth rates may vary across the region, the collective commitment to controlling inflation and adopting prudent monetary policies has been pivotal," said Carlos Kuriyama, director of the APEC Policy Support Unit.
"As we move forward, it is crucial that we remain vigilant and flexible, ensuring that our economies can weather future challenges and continue on a path of sustainable development."
Inflation moderating
The report noted that APEC economies have seen significant success in moderating inflation. The average inflation rate declined to 2.8% in June 2024, down from 5.9% in January 2023 — underscores the effectiveness of the monetary policies implemented across the region.
"Central banks in APEC have mostly maintained a cautious approach, avoiding premature rate reductions that could trigger capital flight and currency depreciation," said Rhea C. Hernando, an analyst with the Policy Support Unit. "As a result, APEC has seen the appreciation or slowing depreciation of 20 currencies against the US dollar in recent months."
Within the APEC region, trade performance also expanded, with merchandise exports in the first quarter of 2024 growing by 3.9% in volume and 1.6% in value compared to the same period in 2023.
The report said this positive trend aligns with the anticipated global trade volume rebound of 3.1% in 2024.
Glacer Niño A. Vasquez, a researcher with the Policy Support Unit, said additionally domestic consumption had shown resilience, further bolstering economic optimism across the region.
He noted that the Manufacturing Purchasing Managers' Index across APEC economies have remained steady, reflecting favourable manufacturing activity.
The report also highlights that the region is currently grappling with increased trade tensions, which have led to a notable rise in trade restrictions and remedies, such as anti-dumping and countervailing duties.
Persistent supply chain disruptions have also increased the cost and time of transporting goods across borders, putting additional pressure on prices.
The report said strategic economic policies and international cooperation are expected to play a crucial role in navigating these issues.
"APEC economies are encouraged to adjust monetary policy carefully, rebuild fiscal buffers, and explore policy alternatives that enhance trade relations without restricting trade and investment," it added.
Kuriyama concluded that steady growth across the APEC economies, despite global uncertainties, is a testament to the region's resilience and adaptability.
"As we continue to navigate complex challenges, APEC's commitment to sound economic policies and regional cooperation will be critical in sustaining this momentum and fostering long-term prosperity," the director of the APEC Policy Support Unit said.
