Growth In Apec Will Reach 3.4 Pct In 2024 -- Report

KUALA LUMPUR, May 18 (Bernama) -- The growth in Asia-Pacific Economic Cooperation (APEC) will reach 3.4 per cent in 2024 and slow to 2.9 per cent in 2025-2026, according to APEC Regional Trends Analysis, May 2024.

The report said the projected economic moderation reflects uncertainties from trade protectionism, persistent inflationary pressures and geopolitical tensions.

“Indeed, investors are hedging against intensifying global uncertainties by demanding more gold, reflected in prices that have soared by 17 per cent, from around US$2,050 per troy ounce in January 2024 to about US$2,400 per troy ounce in April 2024,” it said.

According to the report, high debt levels continue to be a concern; the general government gross debt-to-gross domestic product (GDP) ratio surged during the pandemic and remains persistently high post-pandemic.

A confluence of factors, including extensive stimulus initiatives and ongoing fiscal support amid economic challenges, have contributed to the elevated debt levels.

It noted that in the APEC region, the ratio has increased significantly to 104.5 per cent of GDP in 2023 from below 100 per cent pre-pandemic.

Hence, APEC’s public debt could go up to 110 per cent of GDP in the near term due to the combined impact of the pandemic aftermath and fiscal support packages aimed at assisting vulnerable groups.

“Ongoing uncertainties make it more challenging for economies to fully offset debt incurred during episodes of health and economic crises and return to the pre-pandemic level.

“Despite these challenges, there exists considerable upside potential driven by the resurgence of consumption, increased investment, revitalized tourism and the expected rebound in trade. These factors could help sustain economic growth in the region,” it said.

On another note, the report said inflation in APEC is expected to gradually ease over the short term, from 2.9 per cent in 2024 to 2.5 per cent in 2025 and 2.4 per cent by 2026.

“With inflation showing signs of moderation, the majority of APEC economies have opted to keep their key policy rates unchanged, aligning with the US Federal Reserve’s decision to hold interest rates steady,” it said.

Besides, the report stated that there are bright prospects for trade in the APEC region in the near term.

“Projections paint a picture of robust recovery in 2024, with growth estimates spanning from 0.6 per cent to 12.6 per cent across APEC economies.

“The regional average is estimated to reach 4.0 per cent, higher than forecasts for global trade. This favourable trend is expected to continue in 2025, underpinned by resilient supply chains and more stable economic growth,” it added.

-- BERNAMA