TOKYO (Kyodo) -- The combined gross domestic product of the 21 member economies of the Asia-Pacific Economic Cooperation is expected to grow 6.3 percent this year, turning around from a 1.9 percent decline in 2020 as they gradually reopen while COVID-19 vaccines fan optimism, an APEC report showed.
The organization's Policy Support Unit said GDP is pushed up by "pent-up demand unleashed following a year of subdued spending," but cited an "uneven recovery" largely due to "differences in vaccine access and availability" in the region.
The unit forecast the region's growth will persist in 2022 and 2023 but at a more moderate pace of 4.4 percent and 3.4 percent, respectively, according to the report.
Ideas:
When this article was written, it seemed like there was going to be some optimism as the vaccines globally were beginning to show some promise.
In the weeks almost immediately there was increase globally and especially in the APEC region of the virus variants that is going to dampen an APEC economic recovery.
Yes pend up demand is there but so is the uncertainty of the virus situation.
Even as more people become vaccinated, it seems some still have challenges with the new variants.
And it has to be remembered, even in normal times, economies don't grow in a linear fashion, as there are many different sectors and markets, and unfortunately there are always winners and loser in a market economy, and even quasi-market economies.
Article:
"The region continues to face significant uncertainties, largely linked to how the pandemic is evolving, while job losses due to the pandemic and expectations of higher inflation this year could surpass consumer spending," said Denis Hew, director of the unit.
The report said the 1.9 percent contraction last year was less than the 2.7 percent decline projected a year ago as member economies, such as the United States, China and Japan, stepped up fiscal stimulus and monetary easing measures.
The report was issued ahead of an APEC trade ministers virtual meeting slated for June 5, where pandemic response through trade is expected to be on top of the agenda.
Ideas:
Most countries probably had some kind of stimulus packages to help their respective economies, but not stimulus packages work the same way and or help in the same way
So while the US and China might have appeared to come out of the pandemic, in terms of its economy a little better than other countries, it must be remembered and economic growth or GDP growth alone is not the real economy.
In those countries and globally the real economy is jobs and salaries. So while GPD may have grown, what about the the lives of real people. How many are still without jobs, and not just in the US, but globally, how many businesses have failed or gone under, how many people are living on minimal wages still because of the pandemic.
Article:
Ministers are likely to focus on ways to ensure open markets, enable the safe and efficient distribution of vaccines and steer the region toward economic recovery while reaffirming their commitment to the multilateral trading system, according to the APEC Secretariat.
The report said that confirmed vaccine purchases vary from as low as 40 percent of the population to as high as almost 800 percent among the APEC members.
With a population of around 125 million, Japan currently has agreements to receive 50 million doses of COVID-19 vaccine from Moderna Inc. by September, 120 million doses from AstraZeneca Plc and 194 million doses from Pfizer Inc.
Ideas:
Once the populations of the APEC countries can get their populations vaccinated and can control the variants now running wild in all countries the APEC countries can begin to really focus on trade within APEC.
Of course trade doesn't stop because of the pandemic. Of course it did somewhat in the spring of 2020 because of low demand and logistics challenges globally.
At the time of this writing, both South Korea and Japan are in the middle of a variant spreading crisis. But at the same time both countries exports are booming, as they tend to compete in the same markets with similar products.
And both countries have similar lockdown procedures and similar challenges with services, restaurants and so on.
Article:
The COVID-19 pandemic has weakened trade, with countries shutting down borders, disruptions in global supply chains and sharp reductions in overall demand, resulting in a contraction in the volume of merchandise exports of 2.6 percent and imports, 5.7 percent, last year, the report showed.
The value of merchandise trade remained in negative territory in 2020 relative to the level in 2019, with exports decreasing by 4.7 percent and imports by 6.3 percent.
It was better compared to the rest of the world, which recorded a 10.3 percent decline in the value of merchandise exports while merchandise imports also contracted by 9.0 percent.
The 21 APEC economies are Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.
Ideas:
Yes exports were not so good in 2020 but in some countries, again, Japan and South Korea, have come back in a very strong way, with cars and electronic devices to the US and China leading the way.
As supply chains in the APEC region get back to normal in 2021 and consumer demand begins to increase in the region, and all countries begin to control the variant situation, the APEC region no doubt is going the lead the world globally in economic growth.
But it may take some time and maybe not until the fall or winter of 2021 because of the new variants sweeping through the APEC region.
Have a nice day and be safe.
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