KUALA LUMPUR, Nov 16 (NNN-Bernama) — Economic growth in the Asia Pacific Economic Cooperation (APEC) region declined by 3.7 per cent in the first six months of 2020 as consumption, 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 per cent or equal to an output loss of US$1.8 trillion (US$1=RM4.11), 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, said in a statement Monday.
The latest report by the unit said unemployment rates among APEC economies had surged, averaging 4.8 per cent as of September 2020, with more than 74 million people looking for work.
It said household consumption shrank by 7.1 percent during the first half of the year from an average growth rate of three per cent in the first half of 2019.
“Investments contracted by 11.2 per cent, following modest growth of 1.1 per cent during the same period last year,” it said.
The report said growth in the volume of merchandise exports fell by 6.2 per cent and imports recorded a sharp decline of 7.2 per cent in the first half of 2020, down from tepid growth in the first half of 2019.
“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,” Hew said.
However, he said positive contribution came from governments’ fiscal measures with an increase of 2.8 per cent in the first half of 2020 to bolster the health system and support to households and businesses.
On the positive side, he said there were already signs of recovery around the APEC region, especially coming from economies that were able to curb the spread of the virus early on and had reopened their economies as well as improved manufacturing activities.
“These green shoots bring growth projections of 5.2 per cent in 2021, reflecting an economic rebound for the region,” he added.
