APEC Region's Growth Outlook Revised Upwards To 3.4 Pct In 2026, Before Moderating To 3.1 Pct In 2027
KUALA LUMPUR, Nov 15 (Bernama) -- The Asia-Pacific Economic Cooperation (APEC) region's economic growth is projected to reach 3.4 per cent in 2026, up from an earlier forecast of 3.2 per cent, supported by robust technology investment and stronger trade activity.
However, growth is expected to moderate to 3.1 per cent in 2027 amid mounting economic headwinds, including higher energy prices, geopolitical tensions, trade policy uncertainties and tighter financial conditions.
According to the latest report released by the APEC Policy Support Unit, the region's economic resilience has been underpinned by strong technology-related investment and trade, although the increasingly challenging global environment could weigh on its growth momentum in the coming year.
APEC Policy Support Unit director Carlos Kuriyama said the region's economic performance remained resilient but economies would need to strengthen their capacity to withstand emerging risks.
"Growth in the APEC region has remained resilient, supported by strong technology-related investment and trade, but the economic environment is becoming more challenging," he said.
He also said higher energy costs, geopolitical tensions, a rising number of trade-restrictive measures and tighter financial conditions could weaken growth in the near term.
Merchandise trade has been a key contributor to the region's economic performance, with export values surging 22.5 per cent year-on-year in the first half of 2026, compared with 6.5 per cent in the corresponding period last year.
Export volumes also expanded 10.8 per cent, largely supported by strong semiconductor demand.
Nevertheless, trade momentum is expected to ease as geopolitical disruptions and uncertainty surrounding trade policies continue to affect global commerce.
Exports of goods and services by volume are forecast to grow 6.9 per cent in 2026 before slowing to 3.8 per cent in 2027.
Meanwhile, the report said rising energy prices are adding to inflationary pressures across the region, with crude oil prices increasing 35.9 per cent since July 2026, while liquefied natural gas and coal prices rose 40.2 per cent and 14 per cent, respectively.
The higher costs were expected to put additional pressure on businesses and households, with inflation in the APEC region projected to reach 3.2 per cent in 2026 before easing to 2.8 per cent next year.
APEC Policy Support Unit analyst Rhea Crisologo Hernando said higher energy and food prices were squeezing household purchasing power while increasing operating costs for businesses.
"Policymakers face the challenge of managing inflation while supporting economic activity," she said.
The report also highlighted fiscal constraints facing economies, as higher sovereign bond yields and public debt, projected at between 108 and 112 per cent of gross domestic product (GDP) in the near term, are limiting governments' capacity to respond to economic shocks.
It cautioned that the benefits of growing technology investment could also be unevenly distributed, particularly for economies with limited infrastructure, financial resources and skilled workers to support technology adoption.
APEC Policy Support Unit researcher Eldo Simanjuntak said investment in technology offered opportunities to improve productivity, but its benefits would depend on economies' ability to build the necessary skills and investment capacity.
The report called for prudent economic management, diversified investment and energy sources, open trade and stronger regional cooperation to sustain growth and manage risks.
-- BERNAMA