The latest APEC Economic Outlook predicts that despite 2004 producing the strongest economic growth in four years, "the world economy is expected to experience a slight slowdown in economic growth but still maintain a GDP growth of over 4 percent."
In the annual APEC Economic Committee report, Committee Chair, Dr. Choong Yong Ahn, also cautioned that the predicted growth may be slowed by several 'headwind' factors.
"Reflecting the strong growth of domestic demand in major economies, world trade will grow significantly this year as well as next," Dr. Ahn stated in the report.
"However there are a number of 'headwinds' that may slow down this progress. The first is the higher oil prices caused by strong demand mainly from the US and China, and this reflects the 'terror premium' on oil prices resulting from geo-political factors in the Middle East.
"Another is the increasing possibility of rising interest rates initiated by the monetary authorities in the context of a cyclical peak of economic growth and soaring energy costs.
"In this context, the Outlook continues to emphasize the importance of maintaining APEC members' structural reforms to improve the efficiency of their own economic systems in order to sustain economic growth in the medium-term."
The APEC Economic Outlook is submitted annually at the Ministerial Meeting. The report summarizes recent developments and short-term prospects of all APEC Member Economies.
The report also addresses topical structural issues that impact the regional economy at the time the report is produced.
The 2004 Economic Outlook is produced through a collaborative effort of all APEC Member Economies and the APEC Secretariat, with the Economic Committee (EC) Chair's Office and Chile serving as co-coordinators.
The report has been presented to APEC Ministers at their annual meeting currently underway in Santiago and is available on the APEC Website.