The Asia-Pacific’s trade growth is projected to weaken this year due to multiple headwinds in tandem with the world, but brighter prospects for trade are expected in 2024, according to a new report published by the Asia-Pacific Economic Cooperation (APEC) Policy Support Unit.
“We expect a modest growth of trade volumes in APEC this year following the slowdown in global demand,” said Carlos Kuriyama, the newly appointed director for the APEC Policy Support Unit (PSU).
Citing the International Monetary Fund World Economic Outlook, the World Trade Organization and APEC PSU staff calculations, the report forecasts the volume of APEC’s trade of goods and services growing by 2.6 percent and 2.4 percent respectively this year.
These are projected to increase to 4.4 percent and 4.1 percent respectively in 2024, it said.
The report said rising uncertainties weakened merchandise trade in APEC during the first nine months of 2022.
Growth in the volume of APEC’s merchandise exports was flat while merchandise imports grew by 4.3 percent as compared to the same period last year, when these expanded by 14.4 percent and 16.1 percent, respectively.
“Trade volume (was) adversely affected by economic moderation in 2022,” it said. “Trade values remained strong due to relatively high energy prices in 2022.”
The value of merchandise exports and imports grew by 14.5 percent, showing greater resilience due to the relatively high energy prices in 2022, driven in turn by supply shocks.
Meanwhile, the region’s economy is expected to pick up in the short term, with gross domestic product (GDP) projected to expand by 3.1 percent this year.
Downside risks continue to weigh on recovery but have moderated, the report said, referring to high inflation coupled with rising interest rates and debts, reduced investments, geopolitical issues, and new waves of coronavirus disease 2019 (Covid-19).
It, however, identified upside opportunities as reopening of borders and businesses, increased private consumption and targeted fiscal support.
