World Bank Urges Increased Investment to Address Pacific’s Economic Slowdown

According to the report, economic growth in the Pacific region has dropped to 3.6% in 2024, down from 5.8% in 2023, as the effects of the post-pandemic recovery wane.

New Pacific Economic Update Calls for Action on Jobs, Infrastructure, and Climate Resilience

The World Bank has launched its latest Pacific Economic Update, urging significant investment to combat the region's slowing economic growth and to improve livelihoods. Titled Diminishing Growth amid Global Uncertainty: Ramping Up Investment in the Pacific, the report highlights the need for targeted investment to create jobs, enhance infrastructure, and strengthen resilience against climate change, amid a challenging global environment.

According to the report, economic growth in the Pacific region has dropped to 3.6% in 2024, down from 5.8% in 2023, as the effects of the post-pandemic recovery wane. The slowdown reflects weaker investment, increased climate risks, and ongoing structural challenges, all compounded by global economic uncertainty. The report warns that without immediate efforts to boost investment, Pacific nations will struggle to reduce poverty or generate new economic opportunities for their populations.

"The Pacific faces mounting challenges, but there is also an opportunity for transformation," said Stephen N. Ndegwa, World Bank Country Director for the Pacific and Papua New Guinea. "By prioritizing investments in key sectors and increasing efficiency, Pacific countries can unlock economic growth that directly benefits local communities, creates jobs, and strengthens resilience to the impacts of climate change."

The Pacific Economic Update outlines six key recommendations to accelerate investment and ensure that local communities experience the benefits of economic growth. These include:

Investing in High-Potential Sectors: Greater focus on sectors such as agriculture, sustainable tourism, and the blue economy is crucial. These areas can provide jobs, particularly in rural communities, and support local livelihoods.

Infrastructure Development: Upgrading infrastructure—including roads, ports, and energy systems—will enhance connectivity, enabling businesses to expand and creating new employment opportunities across the region.

Building Climate and Fiscal Resilience: Pacific nations must prioritize climate-resilient infrastructure, improve disaster preparedness, and build financial reserves to protect communities from future economic and environmental shocks.

Regulatory Reforms to Attract Private Investment: Creating a more business-friendly environment through regulatory changes will encourage private sector investment, driving growth in key sectors and fostering local economic development.

Access to Finance for Small Businesses: Expanding financial access, particularly for small and medium enterprises (SMEs), will promote long-term economic sustainability and create new growth opportunities.

Leveraging International Support for High-Impact Projects: Pacific nations should tap into global financial resources to fund projects that directly benefit communities and improve resilience.

The report emphasizes that by implementing these recommendations, Pacific nations can overcome current economic challenges, build a more resilient future, and generate tangible benefits for communities, businesses, and governments across the region.