The Pacific region is projected to experience growth of 3.3% in 2024 and 4.0% in 2025, but efforts to build resilience remain crucial, as highlighted in the latest Pacific Economic Monitor (PEM) released by the Asian Development Bank (ADB) today.
A significant contributor to this growth is the restoration of resource exploitation in Papua New Guinea, the largest economy in the subregion. Additionally, the growth is expected to be supported by public infrastructure projects and stable tourist arrivals in many tourism-dependent countries.
However, the region faces several challenges that could hinder future progress, including workforce shortages, limited financial resources, and susceptibility to natural disasters and climate change.
Leah Gutierrez, ADB’s director general for the Pacific, remarked, “This positive growth is good news for the Pacific, but significant downside risks highlight the ongoing need to build resilience.” She further emphasized that ADB will continue to collaborate closely with Pacific developing member countries to manage these risks and safeguard development gains.
The latest PEM focuses on various aspects of resilience building throughout the Pacific. One article examines the climate change and disaster resilience of the Cook Islands, Samoa, and Tonga. Another analysis looks at Fiji’s new fiscal year 2025 budget, which must balance ongoing economic development with debt targets.
Additional articles address public financial management, including Papua New Guinea’s debt sustainability issues, effective management of Constituency Development Funds in the Solomon Islands, and strategies for enhancing resilience in the Marshall Islands, Federated States of Micronesia, and Palau following the renewal of their Compacts of Free Association with the US.
The report also covers topics such as the labor market resilience in Nauru, the future of air travel in Vanuatu, and the challenges of social protection and high living costs in Kiribati, Niue, and Tuvalu.
The PEM’s policy briefs focus on improving public financial management, developing resilient infrastructure, and promoting climate resilience tailored to the Pacific context. One policy brief underscores the importance of understanding the fragility and vulnerability of small island developing states in order to develop effective resilience solutions.
The PEM serves as ADB’s biannual review of policy issues and economic trends in its 14 Pacific developing member countries. ADB also releases quarterly reports on economic trends and policy developments in the region, alongside the Asian Development Outlook (ADO) series.