How will APEC’s leading economies perform in 2024?

APEC economies are projected to see growth this year that, as in 2023, will outpace global economic performance. The growth forecast for the Asia-Pacific bloc stands at 3,5%, compared to 2,6% for the global economy. This indicates resilience in a region that, despite high inflation and a slowdown in consumer spending over the past year, remains strong.

A key driver of this growth is the sheer size of the economies within the bloc, spanning both emerging markets and well-established economies. “Established economies like the United States and China will experience more moderate growth,” says Luciano Paredes, executive director of the APEC CEO Summit 2024. “For instance, we see China returning to growth, albeit at a lower rate. It’s no longer in the double digits as it was in the past decade, but given its size, it still plays a significant role,” he explains.

China, the region’s economic powerhouse, is expected to grow by 4,8%, down from 5,2% in 2023 and still below pre-pandemic levels. Amid this scenario, a positive factor bolstering the outlook for China is Beijing’s planned monetary stimulus package and measures to support the real estate sector.

Stronger growth in China also enhances the outlook for commodities, boosting export revenue forecasts for economies that are major suppliers to China, including Peru. Currently, 60% of Peru’s exports go to APEC economies, with half of that directed to China.

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The United States, on the other hand, is expected to grow by 2,5% this year. With Federal Reserve interest rates expected to decrease and recession fears receding, the world’s largest economy is revising its forecasts upward. The International Monetary Fund (IMF) recently raised its U.S. forecast to 2,8%, two-tenths of a percentage point higher than previous estimates, driven by stronger-than-expected consumer demand. The IMF also raised its overall growth outlook for the U.S. to 2,2% by 2025.

“APEC will continue to grow in the coming years, with China and the United States as leading economies, but we must also pay attention to another fast-growing group within the bloc—Southeast Asia,” Paredes adds.

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Vietnam, the Philippines, and Indonesia make up this group. Although they do not have the size of the largest economies, they are currently forecasted to grow by over 5%, positioning them as key markets by 2030 due to the favorable environment they offer for foreign investment. For Peru, these are countries without formal free trade agreements, despite significant potential in agricultural exports and mining.

The hosting of APEC in Peru is seen as an opportunity to strengthen ties with these economies, says Mónica Chávez, head of Foreign Trade at the Lima Chamber of Commerce.

“The bloc’s main objective since its inception has been to create greater prosperity for its people through economic integration. In that spirit, we should continue promoting access to new markets beyond those we currently have,” she notes.

Chávez also remarked that Peru should capitalize on the medium-term stability in APEC’s trade relations, despite potential impacts from geopolitical conflicts. “We have successfully maintained our trade relationships,” she concludes.