Economic growth across the Asia-Pacific Economic Cooperation (APEC) region is expected to decelerate sharply in 2025, falling to 2.6 percent from 3.6 percent last year.

“From tariff hikes and retaliatory measures to the suspension of trade facilitation procedures and the proliferation of non-tariff barriers, we are witnessing an environment that is not conducive to trade,” Carlos Kuriyama, director of APEC’s policy support unit, was quoted in a May 15 statement as saying.

The report noted that economic and trade activity has slowed across the 21 APEC member economies. Export volume is expected to grow by just 0.4 percent this year, while import volume is projected to rise by merely 0.1 percent—a dramatic decline from growth rates of 5.7 percent and 4.3 percent, respectively, in 2024.

“This uncertainty is hurting business confidence and leading many firms to delay investments and new product launches until the situation becomes more predictable,” Kuriyama added.

The economic turbulence has also reverberated through financial markets. The global volatility index surged to 52 points in April, more than triple its 2023 to 2024 average, while gold hit $3,200 per troy ounce in early May, reflecting investors’ growing risk aversion.

“The global economic picture is highly fragile,” said Rhea C. Hernando, an analyst with APEC’s policy support unit. “General government debt across APEC is projected to hit 110 percent of GDP [gross domestic product] through 2030. At the same time, we’re confronting long-term demographic shifts, including a shrinking workforce and an ageing population. The fiscal and structural stress is real.”

Despite these challenges, the report calls on APEC economies to take coordinated action to stabilize trade and rebuild trust. “This is not the time to retreat behind borders. This is the time to double down on cooperation,” Kuriyama said. “Through collective action, APEC economies can navigate uncertainty and lay the groundwork for a more resilient, prosperous future.”