APEC to record historic contraction in 2020

by BERNAMA / pic credit: apec.org

ECONOMIC growth in the Asia-Pacific Economic Cooperation (APEC) region declined by 3.7% in the first six months of 2020 as consumption and trade and investments reversed to bigger than expected contractions, said the APEC Policy Support Unit.

For the whole year, the region’s economy is expected to contract by 2.5% or equal to an output loss of US$1.8 trillion (RM7.42 trillion), the regional economic forum’s research and analysis arm said.

It said this would be the first contraction for the APEC region’s economy in three decades.

“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 unit’s director Dr Denis Hew (picture) said in a statement yesterday.

On the positive side, he said there are already signs of recovery around the APEC region, especially coming from economies that have been able to curb the spread of the virus early on and have reopened their economies and improved manufacturing activities.

The latest report by the unit said unemployment rates among APEC economies surged, averaging 4.8% as of September 2020, with more than 74 million people looking for work.

It said household consumption shrank by 7.1% during the first half of the year (1H20) from an average growth rate of 3% in 1H19.

“Investments contracted by 11.2%, following modest growth of 1.1% during the same period last year,” it said.

The report said growth in the volume of merchandise exports fell by 6.2% and imports recorded a sharp decline of 7.2% in 1H20, down from tepid growth in 1H19.

However, he said positive contribution came from governments’ fiscal measures with an increase of 2.8% in 1H20 to bolster the health system and support to households and businesses.