ADB: Growth to fall

Business, Normal

The National, Wednesday December 2nd, 2015


THE bigger Pacific island nations such as Papua New Guinea are facing lower growth and tighter fiscal conditions sparked by the low commodity prices, according to the Asian Development Bank.

The bank’s Pacific Economic Monitor December 2015 publication also said other countries in the region were benefitting from strong growth in tourism and fishing license revenues. 

The report highlighted the challenges that PNG faces in financing its 2016 budget deficit. 

“Weak energy export revenues in PNG, and delays in Fiji’s public asset sales, restrain planned expenditures in the near term,” it said.

The report noted that PNG had been severely affected by extreme weather conditions.

Flooding earlier in the year caused an estimated US$36 million (K101m) in damage to infrastructure and agriculture.

The report covered 2015 fiscal outcomes and 2016 budget plans in Pacific island governments. Fiji, Solomon Islands, Tonga, and Vanuatu faced similar impacts from El Niño. 

“Besides the fiscal challenges faced by Pacific economies, we must closely monitor the impacts of on-going extreme and varied weather patterns,” ADB’s Pacific Department director general Xianbin Yao, said. 

“ADB stands ready to help in mitigating the risks of fiscal shocks, and the potential impacts of El Niño, on livelihoods and health outcomes across the region.

“While climate extremes have had mostly negative effects on the region, weather-induced changes in the migratory routes of some fish species have resulted in transitory increases in fishing license revenues for some countries.”

The report said many countries were benefitting from strong growth in tourism, with visitor arrivals in Fiji up by more than nine per cent.