The International Monetary Fund (IMF) presented its latest global economic outlook to leaders of the Asia-Pacific Economic Cooperation (APEC), whose member economies account for about 61 percent of global GDP. The remarks were delivered by an IMF representative at a meeting hosted by President Lee Jae Myung.
Using a ship analogy, the IMF described the world economy as resilient, likening it to a catamaran stabilized by sound institutions and adaptable private sectors. The statement noted that “Decades of hard work have resulted in good policy frameworks such as inflation targeting and fiscal rules. Firms across APEC and beyond have quickly adjusted to shocks, with trade and investment frontloading, supply-chain strengthening, and compressed profit margins.”
Despite ongoing changes in geopolitics, trade, technology, and demographics, the IMF reported that growth has remained steady. According to its forecast, global growth is expected to reach 3.2 percent this year and 3.1 percent next year—slightly below the 3.3 percent recorded in 2024. For APEC economies specifically, growth is projected at 3.1 percent in 2025 and 2.9 percent in 2026, compared to last year’s rate of 3.7 percent.
Global inflation is forecasted to fall further—to 4.2 percent in 2025 and 3.7 percent in 2026—while inflation within APEC economies is expected to remain close to two percent during both years, particularly subdued among emerging markets.
The IMF acknowledged significant uncertainty around these projections due to factors such as ongoing trade tensions, developments in artificial intelligence (AI), financial conditions, and responses from consumers and firms.
Four main policy priorities were outlined: improving public finances where governments are overstretched; preserving financial stability; advancing reforms for stronger growth; and addressing excessive imbalances.
On public finances, the IMF warned that public debt among APEC members is set to exceed 110 percent of GDP next year—with some countries approaching post-World War II highs—and called for measures to reverse this trend: “This trend must be reversed to reduce borrowing costs and build buffers for the shocks yet to come.”
Regarding financial stability, the IMF pointed out risks associated with rapid private investment in technology sectors like AI: “Embracing AI to lift productivity is a big plus, but we must guard against over-enthusiasm followed by abrupt reassessment and correction in the financial markets.”
For economic growth, regulatory reform was highlighted as essential: “Yet, in many economies the main driver of growth — private sector initiative — is held back by red tape... My call is for a regulatory clean-up to sweep away unwanted legacy rules and nontariff barriers...”
On correcting imbalances between saving and spending across different economies, the IMF said: “External rebalancing requires internal rebalancing... Economies that save too much need to spend more... Economies that consume too much need to save more... Rebalancing will be a gradual process...”
The importance of regional cooperation was also emphasized following discussions at a recent ASEAN summit in Kuala Lumpur: “Here at APEC, there are significant economic complementarities... Sail forward together—it is the key to wise navigation.”