PNG leads the way in Pacific growth, says ADB

LNG EXPORTS from Papua New Guinea are expected to drive up the Pacific’s GDP growth average to 10.7%, according to an Asian Development Bank report.

PNG is expected to experience 15% GDP growth this year, however it would drop 10% the following year, registering a growth rate of 5%.

The ADB cautioned policymakers from squandering the situation, saying the benefits of growth should be shared used to reduce poverty and inequality.

Economies in the region are generally expected to perform well this year due to favourable domestic and external circumstances. However, Vanuatu would prove to be the exception as Cyclone Pam has severely affected the country's economic activity, despite noticeable growth in the tourism sector.

The Financial reported the director general of ADB's pacific department, Xianbin Yao saying while most of the region's economies are enjoying "positive near term outlooks", they need to be protected from the effects of climate change.

"Delivering inclusive growth while faced with such volatilities requires the Pacific to focus on maintaining basic public services by investing in climate-proofed essential infrastructure, as well as human capital through education and health spending."

Timor-Leste had a growth rate of 7.1% in 2014, but is expected to slow to 6.2% this year, rebounding to 6.6% next year.

Fiji has experienced its fifth straight year of growth due to expansionist fiscal and monetary policy, as well as well performing tourism and agriculture sectors.

Access to credit still poses a hindrance for stronger and inclusive growth in the Solomon Islands, with the economies of Cook Islands, Samoa and Tonga expected to grow this year but slow-down in 2016.

Kiribati, Nauru and Tuvalu have recorded three years of continuous growth on the back of fishing licence revenues, improved fiscal balances and externally funded infrastructure projects.


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