JAKARTA -  APEC’s Policy Support Unit said in Suzhou on May 21 that the Asia-Pacific economy grew 3.3 percent in 2025, above an earlier 3.2 percent projection, but growth is projected to ease in 2026. 

The APEC Regional Trends Analysis projects regional growth at 3.1 percent in 2026 and 3.0 percent in 2027. APEC said output expansion is slowing in more than half of APEC economies.

The report attributes the weaker outlook to Middle East disruptions, higher energy costs, supply-chain pressure and weaker demand. APEC said oil prices rose 52.8 percent from February 2026, from USD68 to USD103.9 per barrel in March, disrupting shipping and logistics.

“Higher cost of living for families, shrinking margins for businesses, slower job creation and growing uncertainty for economies, these are already being felt across the region,” APEC PSU Director Carlos Kuriyama said.

APEC did not publish a regional employment figure in the release, but it named slower job creation as one of the consequences already affecting the region, alongside higher living costs, shrinking business margins and uncertainty.

Trade data show another source of pressure. APEC said merchandise export volume growth is projected to decline to 3.3 percent to 3.7 percent between 2026 and 2028, after 7.6 percent growth in 2025.

APEC also expects average inflation in the region to rise from 2.4 percent in 2025 to 2.9 percent in 2026. The forecast remains below the projected global average of 4.4 percent. The report said food security pressure also comes from fertiliser exposure, with APEC importing 27 percent of its nitrogen-based fertilisers from the Middle East.

The report says APEC economies should broaden supply-chain routes and services, diversify energy sources, invest in infrastructure and extend support for affected households and businesses.