7 Apr 2009

Pacific economies expected to lag in recovery from global economic crisis

4:12 pm on 7 April 2009

It could be 2011 before Pacific economies begin to recover from the global economic crisis.

The Asian Development Bank's Asian Development Outlook 2009, says economic growth in the region is expected to slow to about 3%, and that figure is bouyed by two large economies, East Timor and Papua New Guinea.

ADB economist Craig Sugden says smaller economies are likely to have considerably slower growth or even contract.

He says the Pacific is lagging about 6 months behind the global economy.

"The global crisis really became pronounced in the middle of 08. It didn't really hit the Pacific until late last year, early this year. So then if the world economy picks up in the second half of 2010, then we're only going to see the Pacific rebound in 2011."

Craig Sugden says economies need to raise internal demand, through fiscal stimulus or monetary expansion.