Goods export growth across Asia-Pacific Economic Cooperation (APEC) is projected to significantly decline to 3.3 percent to 3.7 percent from 2026 to 2028, down from a strong 7.6 percent in 2025, as increasing trade barriers and deepening fragmentation stifle regional trade, according to the latest report by the APEC Policy Support Unit (PSU)
“Near-term trade outlook points to a slowdown, as elevated risks could outweigh still-resilient demand,” the May 2026 APEC Regional Trends Analysis said.
The report said increased trade-restrictive measures and trade remedies, primarily tariffs and anti-dumping, signal growing fragmentation.
“We are seeing supply chain pressures intensify across the region as freight costs on intra-APEC routes continue to rise, driven by higher fuel prices and slowing port traffic,” APEC PSU researcher Eldo Simanjuntak said.
The report forecasts Asia-Pacific economic growth to ease to 3.1 percent this year and moderate further to 3.0 percent in 2027, as output expansion slows in more than half of APEC economies.
“Despite the region’s short-term resilience, economic prospects have been revised down in some economies amid geopolitical tensions and supply disruptions,” it said. “Supply-chain disruptions have intensified downside risks, even as trade policy uncertainty has eased.”
The report attributed the weakening outlook to wider disruptions in the Middle East, which has sent oil prices surging by 52.8 percent since February 2026 from USD68 to USD103.9 per barrel in March, disrupting global shipping and logistics and pushing food prices higher across the region.
"The region enters 2026 with short-term resilience intact, but knock-on energy price shocks, weakening demand, intensifying supply chain disruptions and narrowing space to respond to economic shocks are casting a longer shadow over the medium-term outlook,” APEC PSU Director Carlos Kuriyama said.
“It is ordinary households and businesses that are feeling the consequences most," he said.
The report said oil and gas make up 49 percent of APEC’s energy mix, largely imported from the Middle East, making the region highly sensitive to geopolitical and supply tensions.
The region’s exposure to disruptions in the Middle East also affects other critical inputs of production, including natural gas and fertilizers, it said.
The report highlighted the importance of strengthening supply chain resilience, accelerating energy diversification and investments, continued regional cooperation and agile policymaking to support stability and growth.
“Optimize supply chains by broadening sources, routes and services, enhancing logistics connectivity, and improving efficiency with transparent digital platforms,” it said.
It also underscored the need to diversify energy mix and sources, while also improving and safeguarding energy infrastructure, to reduce exposure to oil and gas shocks.