16 Jul 2015

Storms dampen economic growth in west Pacific

3:31 pm on 16 July 2015

Strong storms in March have dampened economic growth in the Federated States of Micronesia and Vanuatu this year while the rest of the Pacific is expected to see positive growth.

Thursday 19th of March. Farmers from Teoma bush share the last roots from their Kava plantation.

Farmers from Teoma bush share the last roots from their Kava plantation in Vanuatu. Their Chief Peter Kakor says three years worth of the cash crop was destroyed by Cyclone Pam along with a system of staggered food gardens that provided a continuous supply of food and market produce for his village all year round. Photo: RNZI / Koroi Hawkins

In the Asian Development Bank's mid year review of Pacific economies, all countries look set to grow their economies.

The region's growth, measured by gross domestic product, is expected to average 9.9 percent for the current fiscal year.

The ADB's Senior Economist for the Pacific, Christopher Edmonds, is the lead author of the bank's Pacific Economic Monitor report.

He says the outlook for the region is very positive given the number of severe natural disasters this year.

"And that is largely being driven by the first full year of LNG exports from PNG. But we see good performance in a number of the economies. With the downside being that a few of the economies had seen their economic activity fall off as a result of very severe natural disaster."

Christopher Edmonds says the report also has individual country assessments and recommendations, and strategies for building stronger disaster-resilient economies.

Before Cyclone Pam, Vanuatu was projecting a growth rate of 4 percent, however after the storm caused around $US450 million worth of damage, that growth is now projected to decline by half a percent.

The effect of Typhoon Maysak in March has stunted Micronesia's economy and the bank forecasts no change to its GDP from last year.

Papua New Guinea's economy has expanded the most, fueled mainly by the first full year of natural gas exports.

The ADB forecasts 15 percent growth for PNG for the current year.

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