Overview: Economic Stabilization in the Region
The APEC region is experiencing a period of economic stabilization, with growth projected at 3.5% for 2025 and 3.1% for 2026. This trend is driven by a recovery in private consumption and a significant reduction in inflation, which fell from 5.9% in 2023 to 2.9% in 2024. Despite this progress, growth remains below pre-pandemic levels due to restrictive monetary policies.
Geopolitical Context and Trade Risks
Economic prospects are heavily influenced by geopolitical uncertainty and an increase in protectionist measures. Trade fragmentation is identified as the primary threat, leading to more trade restrictions that jeopardize regional supply chains. This volatility may increase production costs and reduce logistics efficiency, potentially deepening the economic divide among member economies.
The Role of Artificial Intelligence
Artificial Intelligence (AI) acts as a dual-edged catalyst for the APEC region. While it is expected to enhance labor productivity and streamline cross-border trade, it also risks widening the digital gap. Variations in infrastructure and regulatory frameworks across member economies could lead to unequal benefits, making technical capacity building and policy harmonization essential.
Interconnectivity of Risk Factors
The sustainability of current growth is contingent upon how economies manage the intersection of economic slowdowns, geopolitical tensions, and the digital transition. Resilience depends on stabilizing macroeconomic indicators while maintaining a commitment to open regionalism to prevent further market fragmentation.
Key Findings on Regional Challenges
Current data suggests that while inflation is under control, high interest rates continue to limit investment across the bloc. Furthermore, trade barriers have reached levels that complicate the flow of goods and services, indicating that the digital divide remains a structural barrier to inclusive growth.
Recommendations for Future Policy Cooperation
First, strengthen multilateral cooperation to reverse the trend of trade fragmentation and protectionism. Second, implement coordinated monetary easing as inflation stabilizes to stimulate regional investment. Third, prioritize the harmonization of AI governance frameworks to ensure equitable technological benefits. Fourth, invest in digital infrastructure within emerging economies to prevent a deepening of the productivity gap. Fifth, enhance supply chain resilience through transparent data sharing and streamlined customs procedures. Finally, maintain an iterative approach to policy making that accounts for rapid shifts in the global geopolitical landscape.
Source: APEC Policy Support Unit. (2026, February 9). APEC gains momentum amid rising risks – Can it last? APEC. https://www.apec.org/press/blogs/2026/apec-gains-momentum-amid-rising-risks–can-it-last