SINGAPORE -- Economic growth in the Asia-Pacific region is expected to decline to 3.3% this year and to remain at this level until 2024, a drop from the 3.8% recorded in 2017 and 2018, according to a report released on Friday by the Pacific Economic Cooperation Council.
The not-for-profit official observer of the Asia-Pacific Economic Cooperation forum is not affiliated with any government. It said a slowdown in the external sector is a major concern, with export growth in the region projected to dip sharply from 4% in 2018 to 0.9% this year, before rebounding to 3% in 2020.
The trade war between the U.S. and China has hit key manufacturing bases such as Singapore, South Korea and Taiwan, which has in turn dragged down export growth in the region.
The PECC said in its State of the Region annual report that Vietnam is likely to benefit from strong exports. "This depends much on the overall environment for trade and whether there are spillovers of the trade conflict into other sectors of the economy," the report says.
Vietnam's exports are predicted to grow more than 12%. The PECC said other Southeast Asian economies are poised to grow at similar trajectories, although expectations are lower for the Philippines and Indonesia.
The overall view of the regional economy is reflected in a PECC regional survey of over 600 respondents from government, business, civil society, academia and the media conducted in August and September. The poll found 42.2% of respondents expected Southeast Asia to experience stronger economic growth over the next 12 months, compared with 30.1% predicting weaker gross domestic product. The remainder was either undecided or expected the same outcome as the year before.
By contrast, 68% believed that the global economy will weaken over the next 12 months. In the poll, 61.4% believed the U.S. would experience weaker economic growth over the next 12 months, while 69.3% said they expected China to grow at a slower pace.
Referring to the 68% that expect a weaker global economy, PECC Secretary-General Eduardo Pedrosa said: "That's a pretty dramatic shift. We haven't seen an outlook like that since we started this survey, sort of, 10 years ago. So that's quite a traumatic finding."
Increased protectionism and trade tensions were seen by 64% of respondents to be top risks to regional growth in the next two to three years, with 55% naming a slowdown in world trade as another risk and 48% pointing to a slowdown in the Chinese economy as a factor hampering growth.