APEC and the Global Economy

IMF News, October 31, 2025

Source details

Speech delivered by Kristalina Georgieva, Managing Director, International Monetary Fund, October 30, 2025.
APEC economies together represent about 61 percent of global GDP.
Uses a ship analogy: the world economy likened to a catamaran with two hulls—sound institutions and policy fundamentals, and a dynamic and adaptable private sector.

Global growth forecasts:
- 3.2 percent this year
- 3.1 percent next year
- 3.3 percent in 2024 (reference)
APEC growth forecasts:
- 3.1 percent in 2025
- 2.9 percent in 2026
- 3.7 percent last year (reference)
Inflation projections:
- Global inflation: 4.2 percent in 2025 and 3.7 percent in 2026
- APEC inflation: hovering close to 2 percent in both years, and staying especially subdued in APEC emerging economies

High uncertainty driven by:
- Easing trade tensions
- Scope and speed of AI’s impact on productivity
- Evolution of financial conditions
- How consumers and firms respond to policy shifts and transformations
Financial stability risk highlighted:
- Surging private investment in technology, notably AI, could lead to over-enthusiasm followed by abrupt reassessment and correction in financial markets
Private sector adjustments cited as sources of resilience:
- Trade and investment frontloading
- Supply-chain strengthening
- Compressed profit margins

Public debt concern:
- Public debt in APEC projected to exceed 110 percent of GDP next year
- Some APEC members at risk of seeing debt burdens soon exceeding all-time highs registered after World War Two
External rebalancing requires internal rebalancing:
- Economies that save too much need to spend more, supported by policies to lift confidence and remove distortions
- Economies that consume too much need to save more, including by curbing fiscal deficits
- Rebalancing will be gradual and requires shared effort

Fix public finances wherever governments are overstretched
- Reverse rising debt trends to reduce borrowing costs and build buffers for future shocks
- Note: “there are enough policy options available to deliver a positive outcome”
Preserve financial stability
- Guard against asset-price corrections linked to rapid private investment in AI and other technologies
Press forward on reforms to lift growth
- Focus on more jobs, more revenue, and higher productivity
- Call for a regulatory clean-up to remove legacy rules and nontariff barriers that hold back private-sector initiative
Address excess imbalances
- Go beyond trade policy to tackle deeper macroeconomic distortions and incentives

Regional cooperation can facilitate rebalancing and spur growth
Opportunities for further cooperation within APEC due to significant economic complementarities
Closing exhortation: “Sail forward together—it is the key to wise navigation.”

Source: IMF — “APEC and the Global Economy” (speech by Kristalina Georgieva, October 30, 2025).