9 Mar 2011

ADB predicts resource-driven growth in Pacific

2:37 pm on 9 March 2011

Resource-rich countries in the Pacific are expected to grow signficantly this financial year.

The Asian Development Bank reports countries such as Papua New Guinea are benefiting from both major new resource projects and better world commodity prices.

The ADB's commodity report, out today, projects that the 14 economies of the Pacific will expand by 6.3 percent in 2011, up from 5.3 percent last year.

It says PNG will grow by 8.5 percent and Timor Leste by ten percent, fuelled by the benefits of liquefied natural gas and petroleum developments.

The Bank says the resumption of gold exports and a stronger forestry sector will expand the Solomon Islands economy by 7.5 percent, while phosphate exports will help Nauru return to moderate economic growth.

The ADB's Pacific Department director, Robert Wihtol, says overall the Pacific economy is doing better thanks to improved world economic conditions.

But he says this masks sharply different performances across the region, and says the smaller and more remote economies are exposed to the costs from rising world fuel and food prices.