BANGKOK, Feb 10 — Economic growth in the Asia-Pacific Economic Cooperation (Apec) region is expected to moderate to 4.2 per cent this year.

The Apec Regional Trends Analysis February report — "Multiple Headwinds Derail Recovery” — has stated that the region’s economic growth would continue at a moderate pace in the coming years, expanding 4.2 per cent this year and 3.8 per cent in 2023.

The report by the Apec policy support unit said higher inflation poses an additional challenge as it has already driven some countries to tighten monetary policy, which could have a dampening effect on economic activity.

The researcher who authored the report, Rhea C. Hernando, noted that Apec’s inflation rate doubled to an average of three per cent in 2021 compared to 1.5 per cent in 2020 due to higher energy and food prices.

"We expect inflation to moderate to 2.5 per cent in 2022, with a further decrease to 2.3 per cent by 2023,” he said.

Hernando said the region’s economic authorities need to continue to anchor inflation expectations with clear monetary policy intentions, along with the stabilisation of global and supply conditions, to help bring down inflation.

Apec policy support unit director Denis Hew said growth in Apec will remain uneven, mostly due to disparities in pandemic management and vaccine coverage.

He said China’s modest economic growth is also expected to have some impact on the economic performance of the region.

"We are dealing with multiple headwinds that derail our push for recovery,” he said.

The report said the Apec region’s economic growth might have moderated in 2021, hurt in part by the emergence of new variants of Covid-19 as well as elevated inflation from the combined effect of supply shocks and strong pent-up demand.

The region’s gross domestic product (GDP) expanded by 5.8 per cent in 2021, lower than the earlier prediction of six per cent, the report said.

Moving forward, it recommended that Apec economies continue to prioritise the health of the people in the region so that they can recover, reopen and rebuild.

Thailand, the host of Apec 2022, will lead efforts towards charting a post-Covid-19 future for the Asia-Pacific region that is resilient, inclusive, balanced and sustainable, guided by its theme, "Open. Connect. Balance”. — Bernama