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APEC Region’s Economy To Grow By 6% In 2021

APEC Region’s Economy to Grow by 6% in 2021

The economy of the APEC region is expected to grow by 6 percent in 2021 and will settle at 4.9 percent in 2022 in anticipation of the unwinding of fiscal and monetary support measures, says a newly published report on economic trends in the Asia-Pacific.        

According to the latest APEC Regional Trends Analysis (ARTA), the Asia-Pacific expanded by 8 percent during the first half of 2021, following a 3.7 percent contraction in the first half of 2020. However, growth among member economies continues to diverge and uncertainties remain substantial.

Thailand could achieve 1.3% economic growth this year, as forecast by the Fiscal Policy Office (FPO), said Pisit Puapan, director of the Bureau of Macroeconomic Policy.

But the World Bank has slashed Thailand’s gross domestic product (GDP) projection for 2021 to just 1%, from 2.2% originally forecast, due to the impacts of the COVID-19 pandemic.

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Growth in the volume and value of merchandise trade accelerated by double-digits in the first half of this year thanks to the combined effect of a low comparison point following a substantial economic contraction a year ago and a rebound in economic activity.

Trade in COVID-19-associated goods such as pharmaceuticals, telecommunications equipment and computers continued to be strong.

Decline in greenfield investments and rising inflation

However, the analysis also saw a steep decline in greenfield investments to the APEC region, plunging to the lowest level in almost 20 years. This is particularly concerning given the crucial role they play in boosting infrastructure development and productivity as well as improving domestic technology and skills.

Another concerning development is rising inflation. The region recorded a higher inflation rate of 2.6 percent in the first nine months of 2021, after averaging 1.5 percent in 2020. The analysis points out the risk of an upward trend in inflation to economic recovery if left unaddressed.

“APEC, along with the global economy, is in uncharted territory, where recovery is underway even amid an ongoing pandemic,” said Dr Denis Hew, Director of the APEC Policy Support Unit, which produced the report.

“There are many hard-earned lessons from the pandemic, central to which is that economic, trade and health policies are…

Source link : APEC Region’s Economy to Grow by 6% in 2021 by Olivier Languepin

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