In the first six months of 2020, economic growth in the Asia Pacific Economic Cooperation (APEC) region decreased by 3.7 per cent and is expected to contract by 2.5 per cent for the whole year.
According to a report by the Apec support unit, this was equivalent to an output loss of US$1.8 trillion (K6.17 trillion), and due to the pandemic. This was also the first time in three decades that the country is set to contract.
APEC policy support unit director Dr Denis Hew said, “Apec was formed more than 30 years ago and has seen economic recessions, financial crises, commodity price volatility, pandemics and terrorist attacks. Yet, in terms of economic losses, this has been a year like no other.”
The report added that unemployment in Apec economics dramatically increased, an average of 4.8 per cent as of September with millions of people still looking for work. The report also said that trade and investments had reversed contractions bigger than expected.
Household consumption decreased by 7.1 per cent and investments also contracted by 11.2 per cent. The volume of merchandise exports fell by 6.2 per cent while imports declined by 7.2 per cent.
“Trade performance in the APEC region was adversely affected by the combined impact of the temporary closure of borders, disruptions in global supply chains, and persistent trade and technology tensions,” Dr Hew said.
The positive contribution to growth came from the spending of government with an increase of 2.8 per cent during the first half of the year. Dr. Hew stressed recovery in the Apec region, especially in countries that were able to contain the spread of the virus early on.
The recent Apec trends highlighted the need for these economies to continue deploying monetary and fiscal measures, and the report also said that member economies should implement and introduce structural reforms to support recovery in the long run.
Meanwhile, in the next coming days, leaders and ministers from Apec’s 21 member economies will gather to discuss the challenges and the resolutions of the pandemic. Malaysia is the host of APEC 2020.
