Asia-Pacific GDP forecast to grow 3.1% in 2023
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Asia-Pacific GDP forecast to grow 3.1% in 2023

The Asia-Pacific region's economy is projected to expand 3.1% this year before dropping to 2.9% growth in 2024 as downside risks continue to pressure recovery, according to an analysis from an Asia-Pacific Economic Cooperation (Apec) research unit.

A new report by the Apec Policy Support Unit (PSU) indicated the region's GDP growth will pick up shortly from 2.6% last year, as estimated by the IMF's World Economic Outlook.

This year, the regional economy will be bolstered by upside opportunities such as the reopening of borders and businesses, as well as an increase in private consumption.

Downside risks such as inflation, higher interest rates and geopolitical issues will have moderate effects on the economy, said the report.

In 2022, inflation in the Asia-Pacific region was 5.8%, the highest since the 2008 financial crisis when it peaked at 6.6%.

PSU estimates regional inflation will drop to 3.9% this year before declining further to 2.7% in 2024.

"The sustained and broad-based increase in prices prompted an aggressive and synchronised response from monetary authorities across the world," said senior researcher Rhea Hernando.

"In Asia-Pacific, we are seeing the majority of central banks increase interest rates to dampen price pressures."

Trade growth in the region is projected to weaken in 2023 as global demand slows. Growth in volume of imports is likely to decline to 2.4% year-on-year in 2023 from 4.2% in 2022, while exports will expand 1.6% from a year earlier, indicated the report.

Volume growth in goods and services imports would reflect a similar trend, projected to drop to 2.4% from 4.9% last year, said PSU.

Goods and services exports, on the other hand, are on course to expand 2.6% this year compared with 2% in 2022.

PSU expects the region's trade outlook to brighter in 2024, with goods exports and imports expanding 3.5% and 3.7%, respectively. Goods and services volume growth will increase 4.4% next year for exports and 4.1% for imports, according to the report.

The global economy is estimated to grow by 2.9% this year and 3.1% in 2024. Global energy and food prices are on a downward trend in 2023 after rising last year due to supply shocks, data by the World Bank revealed.

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