THE Asia-Pacific Economic Cooperation (Apec) region is expected to maintain growth of 3.2 percent in 2026, with technology-related trade and investment providing a key boost even as higher energy costs, geopolitical tensions and trade policy uncertainty threaten to weigh on businesses and consumers.
The latest Apec Regional Trends Analysis kept its 2026 growth forecast unchanged, although projections were raised for five economies and lowered for six. Growth is expected to slow slightly from 3.3 percent in 2025 to 3.2 percent this year and three percent in 2027.
“Apec continues to grow despite a much more difficult external environment, with technology investment, trade and digital services providing important support to the regional economy,” said Carlos Kuriyama, director of the Apec Policy Support Unit, in a statement.
Growth is in tech-related activities
However, Kuriyama warned that growth is becoming increasingly concentrated in technology-related activities while risks are emerging from multiple fronts, including energy prices, geopolitical tensions, trade policies and weather disruptions.
The technology boom has been reflected in stronger regional trade. Merchandise exports rose 18.8 percent in value in the first quarter from a year earlier, while imports increased 10.2 percent. Export and import volumes also climbed 10.8 percent and 11.1 percent, respectively, as demand for technology products supported trade across the region.
At the same time, inflation is expected to accelerate to 2.9 percent in 2026, from 2.4 percent last year, before easing to 2.5 percent in 2027. Higher food and transportation costs are expected to add pressure on prices.
Fuel and insurance costs, along with tight shipping capacity, have also pushed freight rates higher on several intra-Asia and long-haul routes.
“Central banks are facing renewed price pressures at a time when economic growth is expected to moderate,” said Rhea Crisologo Hernando, an analyst with the Apec Policy Support Unit.
She said policymakers face the challenge of keeping inflation expectations anchored without unnecessarily restraining economic activity, particularly as current price pressures are largely driven by external supply shocks.
Supply chain pressures
Meanwhile, supply chain pressures have eased significantly from an April spike. The Global Supply Chain Pressure Index fell 56.5 percent between April and July 2026, while the Trade Policy Uncertainty Index declined to 183.8 points from a 2025 average of 543.
Investment is also becoming increasingly concentrated in technology and energy. Information and communications, electronics and energy accounted for 57.6 percent of global greenfield investment in 2025, nearly 10 percentage points higher than five years earlier. Foreign direct investment in Apec, meanwhile, remained broadly stable.
Weather-related disruptions are emerging as another risk to the regional economy. An intensifying El Niño could trigger drought, heat stress and flooding in parts of the region, potentially cutting agricultural output and pushing food prices higher.
Eldo Simanjuntak, a researcher with the Apec Policy Support Unit, said these risks are increasingly interconnected, with weather shocks potentially affecting food production while energy and shipping costs raise expenses for businesses and consumers.
The report urged Apec economies to strengthen digital infrastructure and connectivity, supply chains and agricultural resilience, while improving early warning systems and the investment environment to support longer-term growth / KOC