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.


ENDS

© Scoop Media

 
 
 
 
 
World Headlines

 

UN: Announces Mission To Combat Ebola

Ebola outbreak: a peacekeeper with the UN Mission in Liberia (UNMIL) wears a protective mask while on duty at UN offices in the capital city of Monrovia. UN Photo/Andrey Tsarkov More>>

Syria: Life-Saving Food Aid In Jeopardy For Millions Of Syrians

18 September 2014 – The United Nations World Food Programme ( WFP ) today warned that it is running out of funds to provide food for almost 6 million Syrians receiving its life-saving assistance. More>>

UN Warns: Hundreds Of Yemeni Families In Need Of Aid

Two displaced girls stand in front of the classroom where their family has been living in Aden, Yemen. Photo: UNHCR/P. Rubio Larrauri More>>

Ukraine: Victim "Tortured By Russian-Sponsored Militants"

GENEVA, September 17, 2014 – Irina Dovgan, a Ukrainian woman who made international headlines after she was publicly abused by Russian-sponsored militants in eastern Ukraine, testified today before the UN Human Rights Council. More>>

Gaza: Detention Conditions Of Palestinians Arrested By Israelis

PCHR Follows up Detention Conditions of Palestinians Arrested by Israeli Forces in Latest Offensive on the Gaza Strip More>>


UN: ‘Heinous’ Murder Of British Aid Worker By Islamic Militants

A wide view of the Security Council in session (file photo). UN Photo/Paulo Filgueiras More>>

ALSO:

UN: Nuclear Programmes Of DPR Korea, Iran Remain Serious Concern

IAEA Director General Yukiya Amano (left) delivers his introductory statement at the Board of Governors Meeting in Vienna, Austria. Photo: IAEA/Dean Calma More>>

Libya: Closer To Brink Of Protracted Conflict And Strife

Special Representative and head of the UN Support Mission in Libya (UNSMIL) Bernardino Léon. UN Photo/Evan Schneider More>>

Get More From Scoop

 
 
 
 
 
World
Search Scoop  
 
 
Powered by Vodafone
NZ independent news