The Asian Development Bank expects Pacific Island economies to return to positive growth this year, although at different rates, and with a great deal riding on successful vaccine roll-outs.
Pacific economies contracted by an estimated 5.8% last year due to the effect of the coronavirus pandemic on tourism and trade flows, and construction activity. The region’s economies are forecast to recovery to 1.4% this year, and 3.8% in 2022, although this is “contingent on improvements in tourism numbers, commencement of delayed construction projects, and resumption of labor mobility and cross-border trade,” according to the ADB.
ADB Director General for the Pacific, Leah Gutierrez says the start of vaccine rollout in many Pacific Island nations bodes well for a level of economic recovery. “However, risks to the recovery remain, particularly in tourism-oriented economies that are feeling the heaviest impacts of the pandemic crisis,” Gutierrez says.
Specific forecasts for Pacific Island nations as per the ADB’s latest outlook report are as follows:
Cook Islands: GDP is expected to fall by more than a quarter (26%) in 2021, before recovering to growth of 6% in 2022.
Federated States of Micronesia: GDP contraction of 1.8% in 2021, 2% growth in 2022.
Fiji: 2% growth in 2021, 7.3% growth in 2022 following an “unprecedented 19% contraction last year”. The ADB says it make take some years for the economy to return to its pre-pandemic levels.
Kiribati: Small contraction of 0.2% this year, 2.3% growth next year.
Marshall Islands: Negative growth of 1.4% in 2021, 2.5% growth in 2022.
Nauru: GDP growth of 1.5%, 1% in 2022 with the impending closure of the Regional Processing Centre.
Palau: Decline of 7.8% this year, growth of 10.4% next year.
Papua New Guinea: Moderate 2.5% growth in 2021, 3% in 2022, although the recent surge in cases threatens prospects for economic recovery.
Samoa: GDP down 9.2% in 2021, recovering to 3.1% in 2022 once full vaccine coverage is achieved.
Solomon Islands: 1% growth this year, 4.5% in 2022 as fishing and construction rebound.
Tonga: a 5.3% contraction exacerbated by Tropical Cyclone Harold in 2021, 1.8% growth in 2022.
Tuvalu: 2.5% growth in 2021, 2% next year.
Vanuatu: 2% growth in 2021 and 4% in 2022, but this is dependent on a successful vaccination rollout and establishment of travel bubbles.