Pacific Islands' Growth Stalls Amid Climate Challenges and Investment Shortfall

The World Bank projects a slowdown in Pacific Islands' growth to 3.6% this year. The decline results from decreased investment and climate risks. The region requires immediate action to boost investment. Fiji's slowdown and Vanuatu's airline liquidation notably impact economic prospects. Enhancing digital and economic connectivity is crucial.

The World Bank forecasts a significant slowdown in economic growth across the Pacific Islands, with an expected rate of 3.6% for this year, down from 5.8% in 2023. The post-pandemic economic rebound shows signs of fading, most notably in Fiji, which contributes to half of the region's output.

The decline is attributed to diminishing investments, heightened climate risks, and various structural challenges. The report warns that without immediate efforts to bolster investment, Pacific Island nations may continue facing difficulties in reducing poverty and creating economic opportunities.

The analysis reveals that natural disasters pose a significant financial burden, costing an average of 1.5% of GDP annually, while factors like high public debt in Fiji and Air Vanuatu's liquidation exacerbate economic vulnerabilities. The region must focus on infrastructure like ports and digital connectivity to capitalize on sustainable tourism, agriculture, and maritime resources.

(With inputs from agencies.)