ISLAMABAD: The Asia-Pacific Economic Update warns that the escalation of trade and geopolitical tensions poses a major near-term risk, and a tit-for-tat trade war will take a heavy toll on regional value chains with impacts on exports, employment and workers’ earnings.

The Economic Update released on Tuesday by the UN Economic and Social Commission for Asia and the Pacific points out that the recent imposition of tariffs by the European Union on Chinese electric vehicles, a new round of United States tariff hikes on Chinese goods this month, further deepening in China-US technological decoupling, and potential tariffs by Asian countries on low-price Chinese products all point to additional frictions and fragmentation in global trade.

The UN report says the upside risks to inflation remain as geopolitical tensions may again drive up food and energy prices and international shipping costs, and lead to prolonged transport disruptions. Weather events affecting agricultural harvests and withdrawals of price subsidies and cost-of-living support may also trigger higher inflation.

According to the report, the near-term outlook points to cautious optimism, as steady economic performance is expected in the second half of 2024, conditional on favourable developments in major advanced and Asia-Pacific economies.

Inflation in the region is also on track to ease further, allowing more accommodative monetary policy stances and price subsidy cuts to rebuild public finances.

Published in Dawn, August 21st, 2024

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Military option
Updated 21 Nov, 2024

Military option

While restoring peace is essential, addressing Balochistan’s socioeconomic deprivation is equally important.
HIV/AIDS disaster
21 Nov, 2024

HIV/AIDS disaster

A TORTUROUS sense of déjà vu is attached to the latest health fiasco at Multan’s Nishtar Hospital. The largest...
Dubious pardon
21 Nov, 2024

Dubious pardon

IT is disturbing how a crime as grave as custodial death has culminated in an out-of-court ‘settlement’. The...
Islamabad protest
Updated 20 Nov, 2024

Islamabad protest

As Nov 24 draws nearer, both the PTI and the Islamabad administration must remain wary and keep within the limits of reason and the law.
PIA uncertainty
20 Nov, 2024

PIA uncertainty

THE failed attempt to privatise the national flag carrier late last month has led to a fierce debate around the...
T20 disappointment
20 Nov, 2024

T20 disappointment

AFTER experiencing the historic high of the One-day International series triumph against Australia, Pakistan came...