The Pacific region is projected to grow by 3.3% in 2024 and 4.0% in 2025, according to the latest Pacific Economic Monitor (PEM) released by the Asian Development Bank (ADB).
A key contributor to this growth is the revival of resource extraction in Papua New Guinea, the largest economy in the subregion. Additionally, public infrastructure projects and steady tourist arrivals in many tourism-dependent countries are expected to boost growth.
However, challenges remain that could hinder future progress, including workforce shortages, limited funding, 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 added, “To manage these risks and protect development gains from shocks, ADB will continue to work closely with our Pacific developing member countries.”
The latest PEM explores various aspects of resilience building in the Pacific. One article highlights the climate resilience of the Cook Islands, Samoa, and Tonga, while another analyzes Fiji’s new fiscal year 2025 budget in relation to maintaining economic development and debt targets.
Additional topics include the debt sustainability challenges facing Papua New Guinea, better 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.
Other articles address the resilient labor market in Nauru, the future of air travel in Vanuatu, and social protection issues amidst the high cost of living in Kiribati, Niue, and Tuvalu.
The policy briefs within the PEM focus on improving public financial management, developing resilient infrastructure, and promoting climate resilience across the Pacific. One brief emphasizes the importance of understanding the vulnerabilities and fragility of small island developing states in crafting effective resilience solutions.
The PEM is a biannual report by ADB that assesses policy issues and economic trends in its 14 Pacific developing member countries, accompanied by quarterly analyses through the Asian Development Outlook (ADO) series.