APEC Reports Resilient Asia-Pacific Economic Growth Through 2026
According to the latest Regional Trends Analysis from the Asia-Pacific Economic Cooperation (APEC), economic growth in the Asia-Pacific region is anticipated to maintain a steady trajectory through 2026. This outlook is bolstered by robust consumption patterns and sustained investments in technology-driven sectors, particularly artificial intelligence (AI).
Growth Projections and Structural Challenges
APEC forecasts regional growth at 3.2 percent in 2025, with a slight easing to 3.1 percent in 2026 and 2.9 percent in 2027. This gradual slowdown is attributed to intensifying structural constraints, increasing trade fragmentation, and escalating geopolitical risks. Despite these headwinds, the updated outlook reflects stronger-than-expected momentum, fueled by firm domestic demand, resilient trade flows, and continued capital infusion into AI and other high-tech industries.
"Near-term growth prospects have improved, supported by resilient demand, robust trade performance and strong AI-related investment," stated Carlos Kuriyama, director of the APEC Policy Support Unit. However, he cautioned that rising trade restrictions and policy uncertainty are clouding the medium-term economic landscape.
Trade Dynamics and Inflation Trends
Merchandise trade demonstrated resilience in the face of global fragmentation. During the first three quarters of 2025, exports surged by 8.0 percent year on year, while imports grew by 7.6 percent, largely driven by demand from technology-intensive sectors. Nevertheless, trade-restrictive measures saw a significant uptick in 2025, with new tariff and non-tariff actions surpassing trade-facilitating initiatives. This trend has heightened costs and uncertainty for businesses across the region.
"Firms have adapted quickly to changing trade conditions," noted Rhea C. Hernando of the APEC Policy Support Unit, "but the proliferation of trade restrictions is making these adjustments more costly and complex." Commercial services trade continued to expand, albeit at a slower pace compared to 2024, with travel services growth moderating, partially offset by steady gains in transport and other service categories.
Inflationary pressures eased further in 2025, averaging 2.4 percent down from 2.6 percent in 2024. This decline is linked to lower energy prices, moderating food costs, and improved supply chain conditions. "Easing inflation has given central banks greater policy space to support growth," explained Glacer Niño A. Vasquez, while highlighting persistent risks from renewed trade barriers and geopolitical shocks.
Risks and Policy Recommendations
APEC also identified widening current-account imbalances and risks associated with concentrated AI-driven semiconductor investment, including supply-chain vulnerabilities and uncertain returns. To sustain growth, the organization urged member economies to:
- Strengthen policy credibility and transparency.
- Align AI investment strategies with workforce upgrading initiatives.
- Deepen regulatory coordination to mitigate trade and geopolitical uncertainties.
These measures aim to foster a more stable and inclusive economic environment as the region navigates evolving challenges and opportunities.
