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). However, there remains a critical need for resilience-building efforts.
A significant contributor to this growth is the revival of resource extraction in Papua New Guinea, the largest economy in the subregion. Additionally, public infrastructure developments and stable tourist arrivals in various tourism-dependent nations are expected to further drive economic expansion.
Despite these positive indicators, the region faces several challenges that could impede 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 emphasized ADB’s commitment to collaborating closely with Pacific developing nations to manage these risks and safeguard development achievements from unforeseen shocks.
The recent PEM delves into various aspects of enhancing resilience throughout the Pacific. One analysis focuses on the Cook Islands, Samoa, and Tonga, assessing their capacity to withstand climate change and natural disasters. Another examination reviews Fiji’s budget for the 2025 fiscal year, discussing the importance of balancing economic growth with maintaining debt targets.
Other articles within the report address issues such as debt sustainability in Papua New Guinea, effective management of Constituency Development Funds in the Solomon Islands, and strategies for reinforcing resilience in the Marshall Islands, Federated States of Micronesia, and Palau following their Compacts of Free Association with the US.
Additionally, the PEM covers topics like the labor market resilience in Nauru, the prospects for air travel in Vanuatu, and the impacts of high living costs and social protection in Kiribati, Niue, and Tuvalu.
The policy briefs in the PEM advocate for improvements in public financial management, the development of resilient infrastructure, and enhancing climate resilience specific to the Pacific context. One brief underscores the necessity of understanding the fragility and vulnerability unique to small island developing states in the region to effectively forge resilience solutions.
The PEM serves as a biannual analysis by ADB on economic trends and policy issues affecting its 14 Pacific developing member countries. ADB complements this with quarterly reports on economic trends and policy shifts in the region, along with the Asian Development Outlook (ADO) series.