Growth in 11 Pacific island nations, including Fiji, has decreased to an estimated 3.6 percent this year, down from 5.8 percent in 2023. The World Bank’s October Pacific Economic Update, released in Suva, attributes this slowdown mainly to Fiji, which accounts for more than half of the region’s economic output, alongside a slowdown in the Solomon Islands due to structural challenges.
The report indicates that about half of the 11 Pacific Island Countries (PICs), including the largest economies, Fiji and Solomon Islands, are projected to experience slower growth in 2024 compared to the previous year. However, growth in some countries, excluding Fiji, is estimated to have increased from 3.6 percent in 2023 to 4.1 percent this year, largely driven by strong performance in tourism and remittance-dependent economies.
Titled “Diminishing Growth amid Global Uncertainty: Ramping up Investment in the Pacific,” the report also highlights a significant easing of inflation across the region, with the median rate dropping from 6.8 percent in 2023 to 4 percent in 2024. In Fiji, inflation is forecasted to average 3.6 percent in 2025-26, following a temporary spike in 2024 due to tax adjustments. Nonetheless, high inflation in the past has kept the cost of essential goods elevated.
Furthermore, the report notes improvements in fiscal balances as a percentage of GDP in various PICs. However, medium-term growth prospects in the region have declined from an annual average of 3.2 percent between 2000 and 2019 to an estimated 2.7 percent from 2020 to 2029, influenced by increasing natural disasters, the impacts of climate change, and weak investment.
To enhance medium-term growth, the Pacific region will need to adopt strategies that foster sustainable investment.