| Photo by Maryland Pride via Wikimedia Commons
BANGKOK, Thailand – The Asian-Pacific Economic Cooperation’s (APEC) new economic data reveals that the region’s economic growth is expected to slow down to 3.2 percent in 2022 after a 5.9 percent expansion in 2021 and improve slightly in 2023 to 3.4 percent.
“Economic activity in the APEC region rebounded in 2021 due to the reopening of borders and businesses,” explained Dr. Denis Hew, Director of the APEC Policy Support Unit. “However, the emergence of the Omicron variant in the second half of last year forced the reimposition of restrictions and lockdowns in some economies, slowing down economic activity.”
Dr. Hew added: “Major manufacturing hubs in the region were affected by the movement restrictions towards the second half of last year. As a result, we are once again faced with congested shipping lanes and ports, shortages of workers and production inputs—these hurt growth and pose risks in the near future.”
The May 2022 issue of the APEC Regional Trends Analysis, which it launched in Bangkok on the eve of the APEC Ministers Responsible for Trade Meeting, highlighted global supply chain disruptions as a significant contributing factor to supply-demand imbalances broad-based increase in prices.
“Rising inflation, particularly of food and fuel prices, really cripple the standard of living and could push more people into extreme poverty,” said Rhea C. Hernando, a senior researcher with the APEC Policy Support Unit.
“Recent reports have estimated that 100 million more people have become poor in 2020 because of COVID-19; on top of that, climate change is seen to push around 68 to 132 million more people into poverty by 2030,” Hernando added. “Aggravating these factors are inflation and conflicts, which could result in around 75 to 95 million more people living in extreme poverty in 2022 alone.”
“As a result of soaring inflation, monetary authorities in the APEC region have signaled their readiness to use available policy levers, such as increasing interest rates to address further inflationary pressures,” Hernando added. “As of early this month, ten APEC economies have decided to tighten their monetary policy stance by raising their benchmark rates.”
Trade activity, nonetheless, accelerated in 2021. The value of APEC’s merchandise exports and imports grew by 27 percent last year, reaching USD 11 trillion or 51 percent of total world trade.
“The ongoing pandemic remains a threat to economic recovery and stability, and we are seeing weaker growth for the APEC region,” Dr. Hew stated. “APEC needs to continue to respond to this fragile recovery by strengthening trade and investment and supporting innovation and digitalization, as these are integral economic drivers under the Putrajaya Vision 2040.”
The report encouraged member economies to uphold their commitments to an open, dynamic, resilient, and peaceful Asia-Pacific through implementing the Aotearoa Plan of Action.
Accelerating human resource development by equipping people in the region with updated skills and knowledge, accelerating progress towards doubling the share of renewable energy by 2030, and exerting intensified efforts to ensure food security in the region is key to achieving APEC’s long-term goals.
“APEC is steadfast on its goal of sustainable and inclusive economic growth; however, the challenge is to translate these aspirations into concrete actions and tangible benefits for all people living in the region,” he concluded.
–With Jay Domingo/PDM