Growth among 11 Pacific island nations, including Fiji, has decelerated to an estimated 3.6 percent this year, a decline from 5.8 percent in 2023. The World Bank’s October Pacific Economic Update, released in Suva, attributed this slowdown primarily to Fiji, which accounts for more than half of the region’s output, along with challenges in the Solomon Islands.
The report indicated that nearly half of the 11 Pacific island countries are projected to experience slower growth in 2024 relative to the previous year, particularly affecting the two largest economies, Fiji and Solomon Islands. Conversely, some nations excluding Fiji have seen growth accelerate from 3.6 percent in 2023 to an estimated 4.1 percent this year, fueled mainly by strong tourism and remittance-driven economies.
Titled “Diminishing Growth amid Global Uncertainty: Ramping up Investment in the Pacific,” the report also highlighted a significant decrease in inflation across the region, with the median rate falling from 6.8 percent in 2023 to 4 percent in 2024. In Fiji, inflation is anticipated to average 3.6 percent in 2025-26, following a temporary increase in 2024 attributed to tax changes. Nonetheless, the report noted that elevated costs of essential goods persist due to previously high inflation rates.
The fiscal balance as a percentage of GDP has improved for several Pacific island countries, but medium-term growth forecasts have diminished from an annual average of 3.2 percent between 2000 and 2019 to 2.7 percent for 2020 to 2029. This decline is linked to a rise in natural disasters, the effects of climate change, and insufficient investment. To stimulate medium-term growth, the region must adopt strategies that foster sustainable investment.