WESTPAC Fiji has released Westpac Pacific Pulse, its first economic report on nine economies in the Pacific region, deliberating on prospects, challenges faced in 2024 and outlook for 2025.
“These small nations, with little to no global influence, faced many challenges last year,” wrote Westpac Fiji economist and report author Shamal Chand.
“They dealt with rising geopolitical tensions, higher commodity and freight costs, migration, and loss of land due to climate change and natural disasters.
“Recently, the Pacific region has gained renewed interest from major global economic players. This has provided opportunities to secure funding and development assistance through grants and concessional funding arrangements.”
A number of major events such as the conclusion of COP29 negotiations minus a conclusive solution to financing needs of small island nations, a number of national elections and the devastating magnitude 7.3 earthquake that struck Port Villa in Vanuatu had significant impacts on local economies.
On Fiji, its resilience stemming from a stronger than expected tourism business forced economic growth revisions in a number of quarters.
Westpac Fiji raised its forecast for Fiji to 3.0 percent from an earlier 2.5 percent growth outlook.
“However, it remains vulnerable to severe weather events being in the cyclone season,” Mr Chand noted.
He added that while there is uncertainty this year on how the proposed tariff hikes by incoming US President Donald Trump would affect Fiji’s key exports to the US, which includes mineral water, additional direct flight announcements to Dallas, US and Cairns, Australia should add to current arrivals and drive an increase in earnings.
Westpac Pacific Pulse provided its outlook on Fiji, Kiribati, Nauru, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu.
NOTE: This article was first published in the print edition of the Fiji Times dated January 11, 2025.
