Growth in 11 Pacific island countries, including Fiji, slowed to an estimated 3.6 per cent this year, down from 5.8 per cent in 2023.
The World Bank in its October Pacific Economic Update released in Suva yesterday, stated this was driven by Fiji, which contributed over half of the region’s output, and a slowdown in Solomon Islands attributed to structural challenges.
The report stated about half of the 11 PICs, including the two largest economies – Fiji and Solomon Islands, are estimated to have experience slower growth in 2024 compared to last year.
The report noted that growth in some countries, excluding Fiji, accelerated from 3.6 percent in 2023 to an estimated 4.1 percent this year, driven primarily by the robust performance of tourism and remittances-led economies.
The report, titled ‘Diminishing Growth amid Global Uncertainty: Ramping up Investment in the Pacific’ also noted that inflation across the region had eased significantly, with the median rate dropping from 6.8 percent in 2023 to 4 percent in 2024.
“In Fiji, inflation is expected to average 3.6 per cent in 2025-26, following a temporary spike in 2024 due to tax adjustments.
“However, due to previous high inflation, the cost of essential goods remains elevated,” it said.
It also reported that fiscal balances as a share of GDP had improved in several PICs, and medium-term growth prospects in the region had fallen from an annual average of 3.2 percent in 2000-2019 to 2.7 percent in 2020-2029 — driven by increasing natural disasters, climate change impacts and weak investment.
To revive medium-term growth, the Pacific will need to pursue strategies to generate sustainable investment.
