APAC's economic growth could worsen in 2020 amid Covid-19

By FARAH ADILLA，May 28, 2020 @ 12:57pm

KUALA LUMPUR: The Asia Pacific (APAC) region recorded weaker economic growth at 3.6 per cent in 2019 compared to 4.2 per cent in 2018, and is expected to worsen in 2020 with the onset of the Covid-19 pandemic.

"Persistent uncertainty is testing our resilience, trade and technology tensions and post-Brexit concerns all contributed to the lacklustre economic activity in 2019.

"The severity and uncertainty as to the duration of the Covid-19 pandemic further aggravate the ongoing challenges," said Apec Policy Support Unit director Dr Denis Hew.

According to Apec Regional Trends Analysis latest report, there was a substantial decline in merchandise trade volume and value in the region due to the implementation of various trade-restrictive measures such as anti-dumping, tariffs, duties and other levies.

Growth in the volume of merchandise exports dropped significantly to 0.6 per cent in 2019, compared to 4.3 per cent in 2018, while the volume of merchandise imports turned negative in 2019 after a 4.9 per cent expansion in 2018.

Similarly, the value of Apec's merchandise exports and imports contracted by 1.9 per cent and 2.9 per cent respectively last year.

The report said contrary to the merchandise trade numbers, the region's trade in services remained positive in 2019, albeit at lower levels than in 2018, attributed to the increasing demand for digital technology services and automated services solutions, among others.

Apec Secretariat executive director Dr Rebecca Sta Maria said closer ties and cooperation between members were vital for ensuring the availability of credible and updated information to help policymakers around the region to develop appropriate policy responses at an exceptional scale.

The report said fiscal and monetary support to mitigate the economic impact of containment measures, as well as stimulus packages are some of the key policy maneuvers that can be used for the uphill battle towards recovery.

"Apec, as an economic and trade forum, will soon have a new vision to guide its work for the next decades. This post-2020 vision will become more critical than ever as we navigate through the new normal and recalibrate our priorities for the future.

"Resiliency, sustainability and inclusivity will take center stage. Support for healthcare systems and emergency preparedness will also be in the spotlight in our discussions," said Hew.

The report said Apec member economies should take advantage of the forum's open and voluntary environment to commence the work towards coordinated policy responses, according to the report.

These policy responses can ensure the free flow of medical goods and food supplies, improved access to and capacity of health systems, support for business and trade activities and a decisive move towards digitalisation to catalyse economic activities in the region.