The growth of APEC’s 21 member economies is expected to buck global trends and outpace the rest of the world in 2012 despite the uncertain environment, according to a new report issued on Thursday by the APEC Policy Support Unit ahead of the Meeting of APEC Ministers Responsible for Trade in Kazan.
APEC economies’ growth moderated from 5.9 percent in 2010 to 4.1 percent in 2011 but kept ahead of the 3.9 percent global growth rate in 2011, the latest APEC Economic Trends Analysis reveals.
The moderation of APEC economies’ growth partly reflected weaker investment and exports amid the intensification of the Euro area debt crisis and disruptions to the APEC region’s supply and production chains caused by a series of natural disasters. Private domestic consumption within APEC economies was robust, however, supported by strong income growth and improved employment opportunities.
In 2012, the APEC region’s growth is forecast to accelerate to 4.3 percent and climb further to 4.7 percent in 2013. By comparison, world growth is projected to decelerate to 3.5 percent in 2012 before rebounding to 4.1 percent in 2013.
“The relative strong performance of APEC economies within the current economic climate is significant,” said Raymond Greene, the APEC Economic Committee’s Chair.
GDP growth of industrialized APEC economies is expected to show resiliency with a 2.1 percent pick-up in 2012 while industrialized economies outside the region are facing the prospect of a mild recession.
Developing and emerging APEC members’ GDP growth is meanwhile forecast to soften to 6.3 percent in 2012. Yet they will remain the world’s fastest growing economies, contributing more than 50 percent of global real GDP growth.
APEC’s developing and emerging economies are furthermore predicted to regain ground in 2013 on 6.9 percent growth, though external factors remain a cause for concern for all APEC members.
“Ongoing economic uncertainty, globally, could negatively impact APEC’s consumers and businesses and deter them from spending and investing, while a re-intensification of the crisis in the Euro area could furthermore set back growth in the APEC region,” cautioned PSU Director, Dr Denis Hew.
“Given that the APEC region as a whole is a net oil importer, large and sustained increases in oil prices could also negatively impact APEC’s growth by putting upward pressure on inflation and deteriorating the region’s terms of trade,” Dr Hew added.
At such a time, it is advised that APEC remain vigilant and take the necessary steps to promote sustainable growth in the region.
“APEC economies should turn risks into opportunities,” said Greene. “APEC’s relatively better growth prospects could lure more foreign investors, providing even greater incentive for member economies to improve the business environment in the region through regulatory reforms that make it cheaper, faster and easier to do business,” Greene explained.
The APEC Policy Support Unit, APEC’s independent research arm, regularly produces the APEC Economic Trends Analysis which is based on wide-ranging data sourced from all 21 APEC member economies as well as an array of key global institutions.