APEC Revises 2025 Growth Outlook To 3.1 Pct Despite Global Challenges

From Nor Baizura Basri

GYEONGJU (South Korea), Oct 30 (Bernama) -- The growth in the Asia-Pacific Economic Cooperation (APEC) region has been revised upward to 3.1 per cent this year, slightly higher than the earlier forecast of three per cent, supported by resilient trade activity and robust demand for high-tech goods.

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In its latest report on APEC Regional Trend Analysis released here today, the APEC Policy Support Unit said that momentum, however, is expected to slow next year, with growth moderating to 2.9 per cent.

This is due to rising public debt, weaker trade performance and fading temporary drivers such as advance shipments and inventory build-up in anticipation of trade restrictions.

“APEC economies, particularly businesses, have demonstrated remarkable agility in responding to shifting trade and policy conditions.

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"But this resilience is being tested as the boost from temporary factors fades and deeper structural pressures, like rising debt and slowing trade, begin to take hold," said APEC Policy Support Unit director Carlos Kuriyama in a statement today.

He noted that while the number of trade-facilitating measures has been growing, the combined effect of rising trade-restrictive measures and trade remedies now points to deepening trade frictions.

According to the report, merchandise trade in APEC expanded solidly in the first half of 2025, with export and import values rising by 6.5 per cent and 6.1 per cent, respectively.

Trade volumes of exports and imports also grew by 8.8 per cent and 8.5 per cent, respectively.

“Trade momentum this year has been encouraging, but much was driven in part by businesses rushing to export before new restrictions could take effect,” said Glacier Nino A. Vasquez, who is a researcher with the Policy Support Unit and the co-author of the report.

“Goods export growth is expected to slow to around 1.1 per cent next year, as these transitory factors wane and trade tensions persist,” he added. 

Meanwhile, inflation in APEC has continued to moderate, averaging 2.2 per cent in the third quarter of this year, aided by improved supply conditions and relatively stable commodity prices.

This provided central banks with room to ease policy rates and spur economic activity, although maintaining a delicate balance is crucial to keep price pressures in check, the report said.

It also stressed that cooperation remains a critical anchor to safeguard economic stability.

"As trade frictions grow and uncertainty persists, a predictable policy environment, together with open dialogue, will be essential to restore confidence and sustain growth across the region," it added.

Kuriyama pointed out that APEC must navigate a delicate path that preserves economic stability while advancing bold reforms to strengthen resilience.

“An adaptive regional cooperation is essential, and this is where APEC plays a vital role by providing a platform for open dialogue and shared solutions that promote predictable and transparent frameworks to foster trade and investment," he said.

Apart from that, the report also warned of growing fiscal constraints across the region.

"General government gross debt in APEC is projected to exceed 110 per cent of gross domestic product by 2026, a significant increase from earlier forecasts.

"This reflects lingering pandemic-related expenditures, slower revenue recovery and increased spending to support growth and social services as populations age," said the report.

Another co-author of the report, Rhea C. Hernando, who is also an analyst with the APEC Policy Support Unit, said that rising debt is eroding fiscal space just as economies need to invest in innovation, infrastructure and human capital.

This is especially as ageing populations require higher spending on health, pensions and social services.

“Reforms that strengthen fiscal frameworks and improve public spending efficiency are increasingly necessary to adequately respond to future shocks,” she added.

-- BERNAMA