Economic growth in the Asia-Pacific Economic Cooperation (APEC) region has slowed despite early trade gains, yet new opportunities are taking shape driven by the transformative potential of artificial intelligence (AI) while greenfield investment remains a bright spot, according to the latest APEC Regional Trends Analysis.
“Greenfield investments in AРЕС remain resilient, driven by the shift toward strategic and high growth sectors amid digitalisation and structural transformation,” it said.
In a news alert, APEC Policy Support Unit Director Carlos Kuriyama, analyst Rhea Crisologo Hernando and researcher Glacer Niño Vasquez said announced greenfield projects in APEC reached USD595 billion in 2024, up 56 percent compared to the level in 2021, underscoring investor confidence in new capacity and innovation.
“Sustained investments in innovation and digitalization signal an ongoing shift toward productivity-enhancing sectors, which bodes well for APEC’s growth trajectory,” they said.
Kuriyama, Hernando and Vasquez said digital technologies, particularly AI, are poised to amplify these gains.
They cited modelling estimates suggesting that when treated as a productivity shock, AI adoption could raise gross domestic product (GDP) by 1.3 percent to 3.9 percent.
On average, APEC economies already score above global averages on AI readiness, highlighting strong potential to capture digital dividends, they added.
The report said APEC's advancing Al readiness positions the region to leverage digital innovation for productivity gains, contingent on supportive policy frameworks.
“Still, digital capacity remains uneven across the region, with persistent gaps in digital skills limiting broader adoption. Closing these gaps will be key to unlocking AI’s full economic potential and ensuring that its benefits reach all people, across communities, sectors and economies,” Kuriyama, Hernando and Vasquez said.
They said that despite the emergence of new technologies and the relative resiliency of greenfield investments in productivity-enhancing projects, downside risks are expected to dominate, marked by policy uncertainty, geopolitical tensions, and elevated debt levels as legacy from the pandemic.
APEC’s growth slowed to 3.5 percent in the first quarter of 2025, down from 3.8 percent a year earlier, reflecting weaker demand and heightened global uncertainty. Regional growth is now projected at 3.0 percent in 2025 and 2.9 percent in 2026.
“Early trade gains, driven by businesses rushing to ship goods before new trade restrictions take effect, gave the economy a short-term boost. However, sustained momentum requires consistent reforms and renewed investment in productivity,” Kuriyama, Hernando and Vasquez said.
Merchandise trade in APEC posted solid growth in the first quarter of 2025 as businesses moved shipments forward, hedging against possible new trade restrictions. Export and import values rose by 5 percent and 7.7 percent, respectively, while volumes climbed even faster, by 7 percent and 7.9 percent.
“This expansion suggests that early-year trade gains were driven by risk-mitigation strategies rather than a sustained rebound in demand, and may taper off as temporary factors fade. Trade momentum remains highly sensitive to policy developments,” they said.
Services trade exports slowed to 6 percent in the first quarter of 2025 from 11 percent a year earlier, with travel services exports contributing to the decline.
August 15, 2025
