THE Asia-Pacific region is expected to see a significant deceleration in economic growth, with output forecast to expand by only 2.6 per cent in 2025, and 2.7 per cent in 2026, according to the latest report from the APEC Policy Support Unit. This marks a notable slowdown from the 3.6 per cent growth recorded in 2024.
The report attributes the decline to ongoing uncertainty in global trade and investment policy, which continues to cast a shadow over business confidence and economic momentum across APEC’s 21 member economies.
Carlos Kuriyama, Director of the APEC Policy Support Unit, warned that “rising tariffs, retaliatory actions, suspended trade facilitation procedures, and an increase in non-tariff barriers are creating an increasingly challenging trade environment.”
“This uncertainty is hurting business confidence and leading many firms to delay investments and new product launches until the situation becomes more predictable,” he added.
Trade volumes are expected to reflect the broader economic malaise. Export growth is forecast to slow to just 0.4 per cent in 2025, while import growth is predicted to rise by only 0.1 per cent. This contrasts sharply with 2024, when export and import volumes rose by 5.7 per cent and 4.3 per cent, respectively.
Kuriyama noted that protectionist trends and unfair trade practices, such as excessive subsidies, are deterring cross-border business activity.
“What worries us a lot is that all of these uncertainties could affect jobs,” he said.
Financial markets have reacted to the global unease. The volatility index surged to 52 points in April—more than three times the average for 2023 and 2024—while the price of gold spiked to US\$3,200 per troy ounce in early May, signalling a flight to safe-haven assets.
The report also highlights broader fiscal concerns. General government debt across the APEC region is projected to rise to 110 per cent of GDP by 2030, amid mounting structural and demographic pressures.
“At the same time, we are confronting long-term demographic shifts, including a shrinking workforce and an ageing population. The fiscal and structural stress is real,” the report stated.
Despite these headwinds, Kuriyama stressed the importance of recommitting to international cooperation and structural reform.
“This is not the time to retreat behind borders. This is the time to double down on cooperation,” he urged.
“Through collective action, APEC economies can navigate uncertainty and lay the groundwork for a more resilient, prosperous future.” - May 15, 2025
