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According to recent research released by the Policy Support Unit of the Asia-Pacific Economic Cooperation (APEC), the region’s economy increased by just 2.6 percent in 2022, a sharp decline from the 6.1 percent growth seen in 2021.

According to a statement released by the Unit and received here on Wednesday, the region’s economy is anticipated to improve in the short term, with the gross domestic product (GDP) estimated to grow by 3.1 percent this year.

According to Carlos Kuriyama, the recently appointed director of the APEC Policy Support Unit, “the combination of an enduring pandemic, high inflation coupled with rising interest rates and debts, as well as the ongoing geopolitical issues resulted in a significant slowdown in the global economy during 2022.”

“Due to the uncertainties and the bleak economic outlook, both consumers and investors exercised caution last year. Demand and investment activities, therefore, advanced slowly, “added Kuriyama.

The highest rate of inflation to be reported in the APEC since the financial crisis in 2008, when it peaked at 6.6 percent, was 5.8 percent in 2022.

Inflation in APEC is predicted to fall to 3.9 percent this year and then drop even further to 2.7 percent in 2024, according to the research.

The continuous and widespread increase in prices “encouraged a robust and synchronized reaction from monetary authorities across the world,” according to Rhea Hernando, a senior researcher with the Policy Support Unit.

The majority of central banks in APEC are raising interest rates, she noted, in an effort to reduce pricing pressures.

Increased uncertainty also hindered commerce in goods inside APEC in the first nine months of 2022.

Comparatively to the same period the previous year, when these increased by 14.4 percent and 16.1 percent, respectively, respectively, the volume of APEC’s merchandise imports increased by 4.3 percent.

In contrast, the value of exports and imports of goods increased by 14.5%, demonstrating more resilience in light of the relatively high energy prices in 2022, which were in turn fueled by supply shocks.

After the decline in global demand, “we predict a small expansion of trade volumes in APEC this year,” Kuriyama said.

As opposed to this, the trade in commercial services did better in 2022, with exports and imports expanding by 13 and 15.6 percent, respectively, in the second quarter of 2017.

Travel services, which surged by 60% as economies gradually closed borders and loosened coronavirus disease 2019 (Covid-19) regulations, were the primary driver of this sector’s robust trade growth.

The first technical meeting cluster of APEC 2023 is being launched in Palm Springs, California, by representatives from the 21 APEC member economies.

This year, the United States will host APEC, and the forum’s agenda will be driven by the theme “Creating a Resilient and Sustainable Future for Everyone.”

Kuriyama advised member economies to emphasize efforts to coordinate precise and consistent policies by taking advantage of the sessions that would be held in Palm Springs.

He claimed that reducing the growing cost of living requires coordinated macroeconomic policy.

Also, maintaining free, fair, and open trade as well as enhancing trade facilitation might significantly lessen the pressure on food and energy costs, hence reducing the negative impact on food security and the degree of poverty.

The Asia-Pacific Economic Cooperation (APEC) conference fosters regional economic integration and collaboration.

Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong-China, Indonesia, Japan, Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, United States, and Vietnam are among the 21 economies that make up the organization, which was founded in 1989.

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