Growth in 11 Pacific island nations, including Fiji, is projected to have slowed to an estimated 3.6% this year, down from 5.8% in 2023. The World Bank’s October Pacific Economic Update, released in Suva, highlights that this slowdown is largely attributed to Fiji, which accounts for over half of the region’s output, as well as challenges faced by the Solomon Islands.
The report indicates that approximately half of the 11 Pacific Island Countries (PICs), including the largest economies of Fiji and Solomon Islands, are expected to see a decline in growth for 2024 compared to the previous year.
On a positive note, growth in some nations, excluding Fiji, increased from 3.6% in 2023 to an estimated 4.1% this year, driven primarily by strong performance in tourism and remittances.
Titled “Diminishing Growth amid Global Uncertainty: Ramping up Investment in the Pacific,” the report also observes a significant decrease in inflation across the region, with the median rate dropping from 6.8% in 2023 to 4% in 2024. In Fiji, inflation is anticipated to average 3.6% in 2025-26, following a temporary rise in 2024 due to tax changes. However, the enduring effects of prior high inflation have kept the prices of essential goods elevated.
Additionally, the report notes improvements in fiscal balances relative to GDP in several PICs and reveals that medium-term growth prospects have declined from an average of 3.2% from 2000 to 2019 to 2.7% from 2020 to 2029, a shift influenced by increasing natural disasters, climate change, and inadequate investment.
To stimulate medium-term growth, the Pacific region will need to adopt strategies aimed at fostering sustainable investments.