Singapore: 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.
According to BERNAMA News Agency, in its latest report on APEC Regional Trend Analysis released today, the APEC Policy Support Unit stated that growth momentum is expected to slow next year, with growth moderating to 2.9 per cent. This is attributed to rising public debt, weaker trade performance, and the fading impact of temporary drivers such as advance shipments and inventory build-up in anticipation of trade restrictions.
APEC economies, particularly businesses, have shown agility in responding to changing trade and policy conditions, according to APEC Policy Support Unit director Carlos Kuriyama. However, he noted that this resilience faces challenges as temporary factors diminish and deeper structural pressures, like rising debt and slowing trade, become more prominent. While trade-facilitating measures are increasing, the combined effect of rising trade-restrictive measures and trade remedies points to deepening trade frictions.
The report highlights that 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. Glacier Nino A. Vasquez, a researcher with the Policy Support Unit and co-author of the report, stated that trade momentum this year has been encouraging, driven partly by businesses rushing to export before new restrictions take effect. However, goods export growth is expected to slow to around 1.1 per cent next year as these transitory factors wane and trade tensions persist.
Inflation in APEC has moderated, averaging 2.2 per cent in the third quarter of this year, aided by improved supply conditions and relatively stable commodity prices. This situation has provided central banks with room to ease policy rates and spur economic activity, though maintaining a balance is crucial to keep price pressures in check. The report emphasized that cooperation remains a critical anchor to safeguard economic stability, with a predictable policy environment and open dialogue being essential to restore confidence and sustain growth across the region.
Kuriyama emphasized that APEC must navigate a delicate path that preserves economic stability while advancing reforms to strengthen resilience. He highlighted the importance of adaptive regional cooperation and APEC’s role in promoting predictable and transparent frameworks to foster trade and investment.
The report also warned of growing fiscal constraints across the region, projecting that general government gross debt in APEC will exceed 110 per cent of gross domestic product by 2026. This increase reflects lingering pandemic-related expenditures, slower revenue recovery, and increased spending to support growth and social services as populations age. Rhea C. Hernando, another co-author of the report and an analyst with the APEC Policy Support Unit, noted that rising debt is eroding fiscal space just as economies need to invest in innovation, infrastructure, and human capital, especially as aging populations require higher spending on health, pensions, and social services. She stressed the necessity of reforms to strengthen fiscal frameworks and improve public spending efficiency to respond to future shocks.