The Asian Development Bank (ADB) has revised its growth expectations for the Pacific, projecting a slowdown in tourism growth over the next year. This adjustment could dampen economic growth, with forecasts of an average rise of 3.9 percent in 2025 and 3.6 percent in 2026 across the region. For Fiji, anticipated growth is now pegged at 3.0 percent in 2025 and 3.2 percent in 2026, which is below the regional average.
In its recent Asian Development Outlook (ADO) released in April 2025, the ADB highlighted the expected decrease in tourism—a crucial economic driver for many Pacific economies—and stagnation in petroleum production in Papua New Guinea, the region’s largest economy. ADB’s director general for the Pacific, Emma Veve, remarked on the ongoing vulnerability of the Pacific region to external shocks but emphasized ADB’s commitment to enhancing resilience and promoting sustainable and equitable growth.
It is notable that while tourism had previously seen a robust rebound, the forecast now reflects new challenges. This includes a noteworthy rise in fiscal spending, with the government of Fiji planning public investments to better accommodate an influx of tourists despite these challenges. Additionally, the ADB underscores the importance of expanding private sector development to create a more diverse economic landscape.
Despite these challenges, the overall economic atmosphere may remain hopeful as public investments aimed at improving infrastructure could enhance the region’s ability to attract tourists and boost economic resilience in the long run. The ADB also projected inflation to rise to 3.4 percent in 2025 and 3.7 percent in 2026, which signals the need for careful economic management to sustain growth.
Overall, while the projections show a potential slowdown, there are strategic efforts underway that could help stabilize and possibly accelerate growth in the coming years, encouraging a focus on sustainable practices and improved economic environments in the Pacific.
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