Growth in the APEC region is projected to reach 3.1
percent in 2025, slightly
higher than earlier forecast of 3.0 percent, supported
by resilient trade activity and robust demand for high-tech
goods, according to the latest APEC
Regional Trends Analysis.
Released by
the APEC Policy Support Unit, the report highlighted that
momentum is expected to slow in 2026, with growth moderating
to 2.9 percent amid rising public debt, weaker trade
performance and fading temporary drivers such as advance
shipments and inventory buildup in anticipation of trade
restrictions.
“APEC economies, particularly
businesses, have demonstrated remarkable agility in
responding to shifting trade and policy conditions,” said
Carlos Kuriyama, Director of the APEC Policy Support Unit.
“But this resilience is being tested as the boost from
temporary factors fade and deeper structural pressures, like
rising debt and slowing trade, begin to take
hold.”
“One of the factors we are tracking is
that, while the number of trade-facilitating measures is
growing, the combined effect of rising trade-restrictive
measures and trade remedies now points to deepening trade
frictions,” Kuriyama added.
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Nevertheless,
merchandise trade in APEC expanded solid in the first half
of 2025, with export and import values rising by 6.5 percent
and 6.1 percent, respectively. Trade volumes of exports and
imports also grew by 8.8 percent and 8.5
percent.
“Trade momentum this year has been
encouraging, but much was driven in part by businesses
rushing to export before new restrictions could take
effect,” said Glacer Niño A. Vasquez, a researcher with
the Policy Support Unit and the co-author of the report.
“Goods export growth is expected to slow to around 1.1
percent next year, as these transitory factors wane and
trade tensions persist,” he added.
The report warned
of growing fiscal constraints across the region. General
government gross debt in APEC is projected to exceed 110
percent of GDP by 2026, a significant increase from earlier
forecasts. This reflects lingering pandemic-related
expenditures, slower revenue recovery and increased spending
to support growth and social services as populations
age.
“Rising debt is eroding fiscal space just as
economies need to invest in innovation, infrastructure and
human capital, especially as aging populations require
higher spending on health, pensions and social services,”
said Rhea C. Hernando, analyst with the Policy Support Unit,
and also the co-author of the report.
“Reforms that
strengthen fiscal frameworks and improve public spending
efficiency are increasingly necessary to adequately respond
to future shocks,” she added.
Meanwhile, inflation
in APEC has continued to moderate, averaging 2.2 percent in
the third quarter of 2025, aided by improved supply
conditions and relatively stable commodity prices. This
provided central banks with room to ease policy rates and
spur economic activity, although maintaining a delicate
balance is crucial to keep price pressures in
check.
Even with these emerging challenges, the report
stressed that cooperation remains a critical anchor to
safeguard economic stability. As trade frictions grow and
uncertainty persists, a predictable policy environment
together with open dialogue will be essential to restore
confidence and sustain growth across the
region.
“APEC must navigate a delicate path that
preserves economic stability while advancing bold reforms to
strengthen resilience,” said Kuriyama. “An adaptive
regional cooperation is essential, and this is where APEC
plays a vital role: by providing a platform for open
dialogue and shared solutions that promote predictable and
transparent frameworks to foster trade and
investment.”
