World Video | Defence | Foreign Affairs | Natural Events | Trade | NZ in World News | NZ National News Video | NZ Regional News | Search


Risks to economic recovery still remain: analysts

Risks to economic recovery still remain: analysts

Ningbo, China, 25 Feb 2014 - An unstable economic recovery in the Asia-Pacific region requires APEC member economies to implement structural reforms despite the strengthening of industrial production, higher growth forecasts and the commitment by G20 members to ensure that monetary policy settings will be carefully calibrated, advised analysts.

These recommendations were offered to the APEC Economic Committee on Monday in the port city of Ningbo by economists from APEC, the International Monetary Fund and the Organization for Economic Co-operation and Development and provided context for the region’s challenges.

Exports have been the traditional engine of growth in the APEC region. However, Dr Alan Bollard, the APEC Secretariat’s Executive Director, explained that the sluggish growth in exports over the last few years has significantly dampened the pace of recovery in the APEC region.

“Changes to the composition of exports, supply chains, middle income demand and services growth will inevitably change the nature of trade flows within APEC,” Dr Bollard said. “We have observed that, increasingly, domestic demand is becoming a primary driver for growth in many APEC economies.”

There are downside risks to growth, including the possibility of portfolio reallocation, lower investment and financial disruptions stemming from a disorderly reaction to the normalization of monetary policy in some advanced economies.

While the region’s growth is expected to accelerate at a faster pace in 2014, APEC is now at a critical juncture where economic restructuring is needed to secure the region’s recovery.

“APEC growth in recent years has been driven by increased capital formation,” stated Quynh Le, an analyst with the APEC Policy Support Unit. “Despite this, a slowdown in labor productivity restrained the APEC region from reaching its full growth potential.”

“It is vital for APEC economies to take action to transform investments into higher productivity,” she added.

The region is in a better position in terms of the fundamentals but some policy frameworks remain weak. The APEC Economic Committee is considering recommendations for reform.

“There might be room in developing APEC economies for monetary tightening, improving fiscal buffers and accelerating structural reform by addressing bottlenecks in infrastructure, reform and fuel price subsidies,” acknowledged Rory McLeod, Chair of the Economic Committee. “Formulating credible macroeconomic policy priorities and frameworks will dampen the impact of financial volatility.”

“Some developed economies have expressed interest in dealing with export stagnation by enacting structural reforms that encourage imports, value-added manufacturing and innovation.”

The recent announcement from the G20 to raise collective GDP growth by 2 percent higher than the current trajectory implied by current policies over the next five years sets a target for the global effort to increase investment, lift employment and participation, enhance trade and promote competition, in addition to macroeconomic policies.

“In the near-term, achieving balanced, sustainable and inclusive growth will require APEC to enhance our innovative capacity through greater research and development and improving the business and regulatory environment and ultimately the overall productivity in the region,” concluded McLeod.


© Scoop Media

World Headlines


Werewolf: America, The Gated

How, in a global metropolis like New York, do you write about immigration as a problem to be solved? And yet immigration is a hot button issue among those fighting to break away from the unruly clump of starters in the race for Republican nominee. More>>


Binoy Kampmark: US Bomb Strikes Hospital In Kunduz

According to US military sources, “there may have been collateral damage” to the medical facility. “This incident is under investigation.” A statement issued by the office of the President Ashraf Ghani said that Army General John Campbell, chief of US-led forces in Afghanistan, apologised. More>>


Binoy Kampmark: The Fall Of Tony Abbott

The question was one of timing. The Coalition had been registering losses in poll after poll. The Abbott style hardly improved after a spill was forced on the party. Despite claiming that he would be ushering in a spring clean, he continued bypassing ministers and MPs... More>>



Pacific.Scoop: Smaller Pacific States Call For Coal Moratorium

PNG Loop: Leaders of the Pacific Smaller Island States have called on all nations – especially the advanced economies in the region – to rise to the challenge of climate change. They want to steer the world on a path where climate change is no longer a threat to earth. More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news