In Papua New Guinea (PNG), the subregion’s largest economy, increased output outside the resource sector will underpin economic activity. Some tourism-driven economies, such as the Cook Islands and Samoa, will benefit from the lifting of pandemic travel restrictions along with increased public investment spending. Fiji is also expected to grow, albeit at a more modest pace, due to increasing tourism competition from other destinations, according to the latest issue of the ADB’s Pacific Economic Monitor (PEM).
“The lifting of the last pandemic mobility restrictions has enabled economic activity, such as tourism and implementation of public infrastructure projects, to resume in earnest,” said ADB director general for the Pacific Leah Gutierrez. “The outlook for the Pacific is subject to downside risks, such as sensitivity to international commodity prices and longstanding vulnerability to disasters, but ADB continues to work closely with government counterparts across the Pacific to help mitigate these risks, restore development gains, and support inclusive, sustainable growth in the subregion.”
Pacific economies are expected to grow by 3.3 per cent in 2023 and 2.8 per cent in 2024, as per the Asian Development Bank.
Growth in Papua New Guinea, the Cook Islands, Samoa, and Fiji will be supported by factors like increased output and public investment.
Despite the optimistic projections, risks remain, including sensitivity to commodity prices.
Other short-term downside risks to the Pacific’s outlook include uncertainties around the resumption of stalled public investment projects and the uneven recovery of the crucial tourism sector, exacerbated by possible economic scarring from the pandemic.
Fibre2Fashion News Desk (NB)
