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The Asian Development Bank is forecasting continued economic growth for Pacific economies heading into 2024.
This week, the ADB released its latest edition of the Pacific Economic Monitor which projects collective growth of 3.3 percent for Pacific economies in 2023 and 2.8 percent in 2024.
The lead author of the report Cara Tinio told Pacific Waves the growth was driven by a wide range of factors which differed from country to country.
In Papua New Guinea, growth is projected to be driven mostly by output outside the resource sector.
Continued economic growth forecasted for the Pacific in 2024
"So resource here they define mostly as their mining and their natural gas resources. So more of agricultural exports, and services as business activity normalises with the reopening of borders," Tinio said.
She said for ADB developing member states in the region such as Fiji, Samoa, Cook Islands and Tonga "there is a bit more competition now" following the reopening of international borders.
Tourism is at the heart of ecomonic growth for Pacific nations, bringing in much-needed foreign exchange earnings and creating employment.
"In 2019, there were 2.2. million visitor arrivals to the region which generated receipts of $US4 billion, contributing nearly 8 percent to regional GDP and directly employing over 90,000 people," according to the Pacific Tourism Statistics Strategy 2021-2023.
However, the covid-19 pandemic in 2020 decimated the industry after global travel restrictions began.
"I think we are looking at a lot of [countries] still working to catch up...the tourism-dependent economies, especially the ones which opened just recently. I think they are still a bit below than the arrivals in 2019, said Cara Tinio.
"There was some negative growth in some of our economies during the pandemic so there were some setbacks due to the economic impacts of the pandemic; so they are still working on offsetting those."
Tinio said the pandemic resulted in a "few changes" due to the impact of the pandemic.
"Governments had to spend to help soften the blow to the people who lost employment or had to close their businesses," she said.
"Given that we do have small economies with narrow bases and revenues may be limited, a few economists had to take on a lot more debt. Fortunately in other economies they had access to grant financing so there was less or no need to borrow in in their cases."
She said a number of the Pacific economies would be looking at options to reduce the debt that they have amassed during the pandemic.
Tinio added that ensuring they "monitor spending and maintain discipline in this area" would be necessary for their future economic growth.