The National, Thursday October 24th, 2013
THE Asian Development Bank (ADB) has trimmed its 2013 economic growth forecast for the Pacific region to 5% on the back of lower-than-expected government capital spending in Timor-Leste, slower gold production in Solomon Islands and lower growth prospects in Kiribati and Nauru.
ADB’s previous regional growth forecast for 2013 was 5.2%, following an expansion of 7.6% in 2012.
Director general of ADB’s Pacific department Xianbin Yao said in the bank’s latest Pacific Economic Monitor that the slight downgrade in the growth forecast reflected largely short-term challenges faced by several Pacific economies.
“Despite the slight slowdown, a brighter outlook for the global economy is expected to spill over and likely raise the Pacific region’s growth to 5.5% in 2014.”
The first quarter of this year saw the region’s exports to Australia hit by lower international commodity prices.
The value of exports fell by over 27% year-on-year, with gold and petroleum exports from Papua New Guinea (PNG) down by 32% over the same period. Pacific exports to New Zealand also fell by over 17% in the quarter.
In PNG, persistently lower prices for its commodity exports could make it difficult for the government to continue the stimulus measures it has adopted to counter the adverse impact of a slowdown in LNG construction.