But regional growth has been improving and is expected to gradually accelerate, giving the world economy a boost, an APEC analysis says.
The recently released APEC Economic Trends Analysis says growth in the region was unchanged year-on-year in 2012 at 4.1 percent. Its gross domestic product is forecast to rise by 4.2 percent in 2013, and 4.7 percent in 2014.
“Moderated industrial production, an increase in trade restrictive measures, and the reduced availability of trade finance adversely affected global trade last year. By October 2012, the value of global exports barely grew from the level seen in 2011,” said Dr. Denis Hew, director of the APEC Policy Support Unit, which produced the analysis.
Small, open APEC economies were particularly affected by the weakened trade, posting a GDP growth of only 1.7 percent in 2012, less than half of their rate of economic expansion in the previous year.
But the analysis forecasts a more favorable growth outlook for the short to medium term. It notes that some large companies that performed poorly last year have been steadily improving, and emerging economies in the region are showing continued resilience due to strong domestic demand and investment.
Global trade appears to be getting a lift from these developments, it further says. The volume of world imports increased 4.1 percent year-on-year in January 2013, the sharpest increase since September 2011.
The report states that fine-tuning fiscal adjustment packages, focusing on capital flows, strengthening financial markets, and channeling capital inflows towards infrastructure investment are needed to keep APEC economies moving in the right direction.