Jeju: The Asia-Pacific Economic Cooperation (APEC) has projected a slowdown in the region's economic growth, with a forecast of 2.6 percent for this year, a notable decrease from the 3.6 percent growth anticipated in 2024. This projection was detailed in a report released during the Ministers Responsible for Trade Meeting, which commenced on the southern resort island of Jeju.
According to Yonhap News Agency, the APEC economic report anticipates that growth in the region will further moderate to 2.6 percent in 2025 and slightly increase to 2.7 percent in 2026. These figures represent a decline from the previous year's 3.6 percent growth. The forecast for the APEC region is also lower than the global growth projection of 2.9 percent for this year.
The report highlights the challenges facing the APEC region, citing increased trade disputes, protectionism, and shifts in supply chains within a complex global environment as primary factors for the downgraded growth. These issues are contributing to heightened trade uncertainties and volatility, which are negatively impacting demand, investor confidence, exports, and growth prospects.
APEC's outlook aligns with recent revisions from the Korea Development Institute, which halved South Korea's 2025 growth outlook to 0.8 percent. This revision was attributed to escalating global trade tensions, particularly those stemming from U.S. tariff measures. The International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), and the Bank of Korea (BOK) have also issued conservative growth projections for South Korea, estimating 1 percent and 1.5 percent growth respectively for 2025.
The APEC report also predicts a significant decline in export volumes, projecting a mere 0.4 percent growth in 2025 compared to a 5.7 percent increase the previous year. In April, South Korea's exports saw a modest year-on-year increase of 3.7 percent, but shipments to the U.S. dropped sharply due to hefty tariffs imposed by the U.S. administration. Exports to the U.S. fell by 6.8 percent year-on-year to $10.6 billion, with significant reductions in auto and chip exports.
Seoul's Ministry of Trade, Industry and Energy noted that the high U.S. tariffs have adversely affected the country's exports to the U.S. Against the backdrop of growing global trade uncertainties, this year's APEC trade ministers' meeting assembled trade officials from 21 APEC member economies and senior officials from the World Trade Organization (WTO) and the OECD. The discussions focused on AI innovation for trade facilitation, multilateral trading system connectivity, and prosperity through sustainable trade.