Despite uncertainties, APEC forecasts 3.5% growth

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JAKARTA (ANTARA) – The APEC region is expected to maintain steady economic growth of 3.5%, demonstrating resilience in the face of uncertainties and ongoing challenges.

The region’s gross domestic product (GDP) is expected to grow 3.5% in 2024, in line with the growth rate in 2023, according to the August update of the APEC Regional Trends Analysis.

However, a press release issued by APEC’s Policy Support Group on Monday noted that economic growth is expected to slow slightly to 3.1% in 2025, an improvement from the 2.9% forecast in May.

Carlos Kuriyama, director of APEC’s Policy Support Department, said that as economic growth rates may vary among regions, it is crucial to work together to control inflation and adopt prudent monetary policies.

“As we move forward, it is critical to remain vigilant and flexible to ensure our economy can withstand future challenges and remain on a path of sustainable development,” he said.

APEC economies have achieved significant success in curbing inflation, with the average inflation rate falling from 5.9% in January 2023 to 2.8% in June 2024.

The rate cut highlights the effectiveness of monetary policy implemented in the region.

“APEC central banks have mostly adopted a cautious approach and avoided premature rate cuts, which could lead to capital flight and currency depreciation,” said Rhea C. Hernando, an analyst at the Policy Support Unit.

“As a result, 20 APEC currencies have appreciated or slowed down their depreciation against the dollar in recent months,” Hernando added.

Trade performance within the APEC region has expanded, with merchandise exports increasing by 3.9% in volume and 1.6% in value in the first quarter of 2024 compared with the same period in 2023. This trend is consistent with a forecast rebound in global trade volumes of 3.1% in 2024.

“In addition, domestic consumption has shown resilience, further strengthening economic optimism across the region,” said Glacer Niño A. Vasquez, a researcher in the policy support department.

He noted that the manufacturing purchasing managers’ index of APEC economies remained stable, reflecting good manufacturing activity.

The report highlights that the region is currently grappling with growing trade tensions, which has led to a significant increase in trade restrictions and remedies such as anti-dumping and countervailing duties.

Ongoing supply chain disruptions have also increased the cost and time of moving goods across borders, putting additional pressure on prices.

Strategic economic policies and international cooperation are expected to play a key role in addressing these issues.

APEC economies are encouraged to prudently adjust monetary policy, rebuild fiscal buffers, and explore policy options to strengthen trade relations without restricting trade and investment.

“Despite global uncertainties, the solid economic growth we have seen in the APEC region is a testament to the resilience and adaptability of our economies,” Kuriyama said.

“As we continue to address complex challenges, APEC’s commitment to sound economic policies and regional cooperation will be critical to maintaining this momentum and promoting long-term prosperity,” he said.

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