KUALA LUMPUR, Nov 8 — The Asia-Pacific Economic Cooperation (Apec) region is expected to grow by six per cent in 2021 and settle at 4.9 per cent in 2022 in anticipation of the unwinding of fiscal and monetary support measures, according to the newly published Apec Regional Trends Analysis (ARTA) report.
The Asia-Pacific expanded by 8 per cent in the first half of 2021, following a 3.7 per cent contraction in the first half of 2020. However, the report said growth among member economies has continued to diverge and uncertainties remain substantial.
“Growth in the volume and value of merchandise trade accelerated by double-digits in the first half of this year thanks to the combined effect of a low comparison point following a substantial economic contraction a year ago and a rebound in economic activity”, it said.
“Trade in Covid-19-associated goods such as pharmaceuticals, telecommunications equipment and computers continued to be strong.”
However, the analysis also sees a steep decline in greenfield investments in the Apec region, “plunging to the lowest level in almost 20 years.”
This is particularly concerning given the crucial role they play in boosting infrastructure development and productivity as well as improving domestic technology and skills, it said.
Another concerning development, it said, is rising inflation whereby the region recorded a higher inflation rate of 2.6 per cent in the first nine months of 2021, after averaging 1.5 per cent in 2020 with the analysis highlighting the risk of an upward trend in inflation to economic recovery if left unaddressed.
Denis Hew, the Apec Policy Support Unit director, which produced the report, commented that Apec, along with the global economy, is in uncharted territory, where recovery is underway amid an ongoing pandemic.
“There are many hard-earned lessons from the pandemic, central to which is that economic, trade and health policies are intertwined and that good policies matter. Unequal access to vaccines needs to be addressed urgently to avoid a two-track recovery,” he said.
“Apec economies should also think ahead toward facilitating a gradual and steady economic reopening to revive viable sectors such as travel and tourism, reinvigorate manufacturing industries and herald the emergence of new jobs, markets and businesses that could prove more sustainable as well as profitable.”
The report also addressed the existential threat of climate change for the region and humanity as a whole, affecting the region’s financial systems, supply chains and consumer behaviour.
It noted that even in the best-case scenario, where climate change is kept at or below 2.0°C, Apec can expect gross domestic product losses of up to 11.3 per cent by 2050.
— Bernama
