The Asian Development Bank has warned Pacific governments, including Fiji, to urgently bolster economic resilience as fallout from the Middle East conflict threatens to dent growth and squeeze already tight public finances. The bank released its flagship Asian Development Bank Outlook April 2026 in Suva on Monday, projecting moderate expansion across its 14 Pacific member countries — an average regional growth of 3.4 percent in 2026 and 3.2 percent in 2027.
“There is an unprecedented need for the Pacific to build resilience against the economic impacts of the Middle East conflict,” ADB director general for the Pacific Emma Veve said during the report launch. Veve singled out higher oil prices, prolonged international commodity price spikes and rising trade uncertainty as key channels that “will weigh on subregional growth momentum.”
The ADB said its regional forecasts were based on assumptions finalised on March 10, 2026, under “exceptionally high uncertainty,” and assumed an early stabilisation of the conflict. However, the bank cautioned that emerging evidence since that cut-off points to a greater likelihood of more persistent disruptions to energy and commodity markets — a scenario that would raise the risk of prolonged inflationary pressure and weaker external demand for Pacific exporters.
Fiji’s fiscal position was highlighted as a vulnerability. The report notes that Fiji’s debt-to-GDP ratio is projected at about 84 percent by the end of July this year, a level that leaves limited fiscal space to absorb external shocks without difficult trade-offs in public spending, taxation or borrowing. That projection has sharpened attention on how prepared the government is to respond should oil and commodity prices remain elevated or global trade conditions deteriorate further.
ADB Pacific Subregional director Azusa Sato urged policy-makers to combine prudent macroeconomic management with targeted social measures. “Strengthening resilience — through sound macroeconomic management to address near-term pressures, alongside targeted social support and health system strengthening to tackle long-standing constraints — will be critical to sustaining inclusive growth,” Sato said, stressing the need to protect vulnerable households while maintaining fiscal sustainability.
The outlook places a premium on policy choices at a time when small island economies face limited buffers. For Fiji and other Pacific economies, which depend heavily on tourism, remittances and commodity trade, sustained global price shocks could ripple through inflation and current accounts, complicating recovery paths set out in the ADB’s baseline forecasts. The bank’s warning frames the current moment as one where governments must “double down” on resilience-building to weather a potentially prolonged period of external uncertainty.
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