The Asia-Pacific Economic Cooperation (APEC) region is expected to post a 2.7 per cent economic decline in 2020 due to the impact of COVID-19.
This will be the most significant fall since the near-zero growth rate logged in 2009 during the global financial crisis, according to the APEC Secretariat. Last year, the 21-member region recorded an economic growth of 3.6 per cent.
APEC comprises of Australia, Brunei Darussalam, Canada, Chile, China, Hong Kong, Indonesia, Japan, the Republic of Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Thailand, the United States (US) and Vietnam.
The COVID-19 pandemic is an unprecedented health and economic crisis facing the world. As of April 2020, it has afflicted more than two million people globally, 40 per cent of which come from the APEC region.
With APEC real growth domestic product (GDP) expected to contract by 2.7 per cent in 2020, it is translated to an estimated output loss of USD2.1 trillion and an additional 23 million workers unemployed due to the economic fallout from the pandemic.
Economic activity has been on a near standstill as economies implemented stringent measures to contain the pandemic, including travel bans, quarantines, lockdowns and social distancing measures.
Healthcare systems are grappling with an acute shortage of medical supplies and equipment as well as inadequate numbers of hospital beds and isolation units.
APEC economies responded with exceptional fiscal and monetary measures, representing one to 20 per cent of GDP, depending on fiscal room. The measures are targetted at bolstering health systems and providing direct support to households and businesses, including micro, small and medium enterprises.
Regional cooperation is crucial during a pandemic. Economies should come together to exchange health information, keep open the supply chains for medical and food products and coordinate policy responses. Regional cooperation should be sustained and strengthened to ensure resilience and revive regional growth going forward.
The region’s unemployment rate is projected to rise to 5.4 per cent in 2020 from 3.8 per cent in 2019, or an additional 23.5 million workers being unemployed in 2020.
An economic rebound is forecast for 2021, with the anticipated growth of 6.3 per cent, higher than the projected global economic growth of 5.8 per cent. This rebound depends on the effectiveness of containment mechanisms to avoid a second wave of the COVID-19 pandemic as well as measures to stimulate economy.