APEC Growth Steady, Urges Structural Reforms
Economic growth in the APEC region remains stable in the short term, yet medium-term prospects face mounting risks as trade restrictions, fiscal pressures and geopolitical uncertainties continue to evolve, according to the latest APEC Regional Trends Analysis.
The report projects GDP growth of 3.3 percent in 2025, following an estimated 3.5 percent expansion in 2024, though a further slowdown to 2.7 percent is anticipated in the coming years. Structural challenges, including demographic shifts and rising trade barriers, are expected to weigh on future economic trajectory.
“The region’s growth trajectory reflects both resilience and vulnerability,” said Carlos Kuriyama, Director of the APEC Policy Support Unit. “While we are seeing steady economic activity, sustained growth will require proactive reforms, particularly in trade policy and fiscal management.”
Trade performance in the region has shown modest recovery, with merchandise trade in the first nine months of 2024 increasing by 3 to 4 percent in 2024, reversing the sharp contraction seen in 2023 on a year-on-year basis. However, the number of trade remedies surged to 1,043 by the end of 2024, up from 960 in 2023, highlighting ongoing worries on unfair trade practices.
Moderating inflation trends, on the other hand, offer a measure of relief, with rates easing to 2.6 percent in 2024, compared to 3.8 percent in 2023. This has provided central banks with greater policy flexibility. However, increasing trade restrictions and geopolitical risks could reintroduce price pressures, potentially limiting interest rate adjustments.
“While inflation has moderated, risks remain,” said Rhea C. Hernando, an analyst with the Policy Support Unit. “Ongoing global risks, rising protectionism, and shifts in trade policy could complicate efforts to maintain price stability in the months ahead.”
The region’s fiscal position remains fragile, as sustained government expenditures continue to outpace stagnant revenue collection, which has hovered around 28 to 29 percent of GDP for over two decades. Without fiscal adjustments, rising public debt levels could strain economic resilience.
Meanwhile, global financial volatility has driven investors toward safe-haven assets, pushing gold prices to record highs. Escalating economic and geopolitical uncertainties, reflected in the sharp rise in policy uncertainty indices since 2020, have fueled increased hedging.
“Macroeconomic stability hinges on careful fiscal planning,” said Glacer Niño A. Vasquez, a researcher with the Policy Support Unit. “Governments need to strike a balance-ensuring fiscal prudence while enhancing investments in infrastructure, digital transformation, and human capital to boost productivity and growth.”
The report underscores the urgent need for structural reforms to sustain long-term economic momentum. Flexible and coordinated monetary and fiscal policies will be necessary to control inflation while preserving growth potential. Deeper regional cooperation will be essential to foster open trade and investment while addressing shared challenges. Productivity-enhancing reforms that promote innovation, technological adoption, and workforce skills development will also be critical to securing APEC’s long-term economic future.
“As global uncertainties persist, APEC economies must reinforce trade openness, strengthen policy coordination, and pursue long-term reforms,” Kuriyama concluded. “A forward-looking approach will be crucial in fostering a resilient and sustainable regional economy.”
https://www.apec.org/press/news-releases/2025/apec-growth-holds-steady-amid-uncertainty–calls-for-structural-reforms