Pacific Economic Update - Recovering in the Midst of Uncertainty - Special Focus: Harnessing the Benefits of Pacific Migration - August 2023

Jul 19, 2026

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The World Bank’s Pacific Economic Update (August 2023) reviews economic conditions across 11 Pacific island economies and explains how growth is returning despite persistent uncertainty. Regional GDP growth is projected to average 3.9% in 2023, supported by renewed tourism, higher public investment, and construction, before easing to 3.3% in 2024. Risks skew downward amid fragile global recovery and elevated inflation, which threaten poverty outcomes. A special focus highlights international labour migration and the opportunity to maximize its benefits through improved investment, inclusive access, migrant protection, and better remittance outcomes.

LanguageEnglish

CategoryResearch & Report

FormatPDF

Pages8

Reading Time20 min

Summary & Key Findings

Economic growth outlook and reopening effects

Risks: fragile global recovery and inflation

Special focus: harnessing the benefits of Pacific migration

Country Snapshots

Authorized Public Disclosure Authorized Pub l ic Disclosure Authorized Public Disclosure Authorized Summary & Key Findings: Pacific Economic Update Recovering in the Midst of Uncertainty Special Focus: Harnessing the Benefits of Pacific Migration August 2023 The World Bank’s Pacific Economic Update provides a twice-yearly assessment of 11 Pacific Island economies: the Federated States of Micronesia (FSM), Fiji, Kiribati, Nauru, Palau, Republic of the Marshall Islands (RMI), Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu. The August 2023 Pacific Economic Update describes a return to growth for the region, largely due to the resumption of tourism, higher public investment and construction. In 2023, an average Gross Domestic Product (GDP) growth of 3.9% is projected for the Pacific region (excluding PNG), up from 2.0% in 2022. Growth is projected to slow to 3.3% in 2024 as the initial demand boost—particularly in tourism—dissipates. However, risks are tilted to the downside amid fragile global economic conditions. While global conditions have gradually improved since the COVID-19 pandemic and Russia’s invasion of Ukraine, progress on reducing inflation in major economies has proven to be more challenging than expected. This has resulted in persistently higher inflation in Pacific Island countries. Slower global growth in major trading partners may present headwinds to the Pacific’s recovery prospects, especially for countries that are highly dependent on tourism and remittances. The new Pacific Economic Update also includes a special analysis of international labour migration, which was an important income source for the region during the pandemic. The report emphasizes that there is a significant opportunity for Pacific countries to maximize its benefit. Headline Findings 6.0% 3.9% growth projected for the Pacific in 2023 Reopening borders has driven economic growth Fragile global economic recovery presents a risk to the Pacific’s outlook Inflation is expected to remain elevated at 6.0% in 2023 Labour migration can significantly Opportunity to maximize the positive contribute to Pacific economies impacts of labour migration Key Findings Average growth of 3.9% projected for 2023 The Pacific region is enjoying a period of economic growth following the COVID-19 pandemic, with 2.0% growth in GDP estimated for 2022, building to an estimated 3.9% in 2023. The growth rate is anticipated to slow in 2024 to an average of 3.3% as the initial demand boost dissipates. Reopening borders has driven economic growth Fiji was the first Pacific country to reopen its borders to tourism and led the region’s economic recovery with a strong rebound of 18.6% growth in GDP in 2022. When other Pacific countries started to reopen their borders in late 2022, the region’s recovery gained momentum. A strong rebound is expected in 2023 due to pent-up demand, albeit at a varying pace across the region. Most Pacific countries are projected to reach their pre-pandemic GDP by 2024, except for Palau, Samoa, and Solomon Islands. Fragile global economic recovery presents risks to the Pacific’s outlook The Pacific’s recovery could weaken if global growth is slower than expected and persistent inflation spurs further monetary policy tightening by major central banks. If Australia and New Zealand consumer spending slows, tourism recovery may suffer in economies such as Fiji, Samoa and Vanuatu. Weakened economic prospects in large economic markets may also dampen demand for Pacific migrant workers and income prospects for the Pacific diaspora. This would result in lower remittance inflows, which is a key source of support for economies such as Fiji, RMI, Samoa, Tonga, and Vanuatu. Inflation is expected to remain high, and is projected at 6.0% in 2023, posing a risk to poverty levels Inflation remained stubborn at an average of over 6.7% in 2022, a substantial increase of 5.2% compared to the 2019-21

FAQs

What explains the region’s growth return in the August 2023 Pacific Economic Update?

Growth is driven mainly by the resumption of tourism, higher public investment, and construction after reopening. Countries are also benefiting from pent-up demand, though at different speeds.

How are GDP growth projections changing from 2023 to 2024?

The report projects average GDP growth of 3.9% in 2023 (excluding PNG). Growth is expected to slow to 3.3% in 2024 as the initial demand boost dissipates.

Why does the update warn that risks are tilted to the downside?

Fragile global conditions and more challenging progress on lowering inflation raise the risk of tighter monetary policy and slower growth in key trading partners. Elevated inflation is also expected to remain high, increasing poverty risks.

What does the special focus on Pacific migration emphasize?

International labour migration is highlighted as a major income source through remittances and knowledge sharing. The report stresses opportunities to maximize benefits through education investment, inclusive access, protection of migrants’ welfare, and better management of return and reintegration, including lowering remittance transfer costs.

Jul 19, 2026

Upload by Patrick