PACIFIC ECONOMIC MONITOR

July 2013 issue

Official launch at the Pacific and PNG Update Conference 27 June 2013 Canberra, Australia

Regional Economic Outlook

Presentation planned

International and regional developments

–Global growth prospects; and Pacific trade, tourism, and remittances

Developments in Pacific Economies

– Common economic policy issues and challenges

Policy Theme–regional economic cooperation and integration

•Weak global economy: Outlook generally improving in 2014

-1 0 1 2 3 4 5 6 7 8

United States

New Zealand

Japan

Australia

Euro area

Developing Asia

Pacific DMCs

World

2014p

2013p

2012e

Sources: IMF.2013. World Economic Outlook (April); and ADB. 2013. Asian Development Outlook Update.

Growth globally and in selected economic regions (percent annual)

-1 0 1 2 3 4 5 6 7 8

United States

New Zealand

Japan

Australia

Euro area

Developing Asia

Pacific DMCs

World

2014p

2013p

2012e

Sources: IMF.2013. World Economic Outlook (April); and ADB. 2013. Asian Development Outlook Update.

Growth globally and in selected economic regions (percent annual)

International and regional developments

Continuing price declines, leading to falls in export earnings

0

75

150

225

300

Mar08 Mar09 Mar10 Mar11 Mar12 Mar13

Crude oil

Coconut oil

Logs

Food index

Commodity prices (index, Jan. 2009 = 100)

Source: World Bank Commodity Price Data (Pink Sheets)

Tourism to the Pacific down from 2012 high, but generally remains robust

0

25

50

75

100

2005 06 07 08 09 10 11 12 13

Australia

New Zealand

Tourist departures to Pacific destinations ('000. January to March)

Mixed trends for Pacific trade with Australia and New Zealand

0

50

100

150

200

250

2000 01 02 03 04 05 06 07 08 09 10 11 12 13

Pacific imports from New Zealand

Pacific exports to New Zealand

Source: Statistics New Zealand.

Pacific trade with New Zealand(NZ$ million, January-December totals)

Pacif ic exports to Australia

0

300

600

900

1,200

2000 01 02 03 04 05 06 07 08 09 10 11 12 13

Pacific imports from Australia

Pacific exports to Australia

Source: Australian Bureau of Statistics.

Pacific trade with Australia(A$ mi l lion, January-December totals)

Employment overseas & remittances— Slight decline of employment in NZ

0

6

12

18

0

40

80

120

Mar09 Mar10 Mar11 Mar12 Mar13

Employed persons ('000, lhs)

Unemployment rate among Pacific workers (%, rhs)

NZL unemployment rate (%, rhs)

Employment of Pacific workers in NZL (quarterly)

Growth in larger resource exporting economies

Growth and inflation trends in the Pacific

-5.0 0.0 5.0 10.0 15.0

Timor-Leste

Solomon Islands

Papua NewGuinea

2014p

2013p

2012e

2011

2010

2009

GDP growth (% per annum)

Growth in tourism oriented economies

-6.0 -4.0 -2.0 0.0 2.0 4.0 6.0 8.0

Vanuatu

Palau

Cook Islands

2014p

2013p

2012e

2011

2010

2009

GDP growth (% per annum)

Growth in relatively diversified South Pacific economies

-6.0 -4.0 -2.0 0.0 2.0 4.0

Tonga

Samoa

Fiji

2014p

2013p

2012e

2011

2010

2009

GDP growth (% per annum)

Growth in the smallest Pacific economies

-20.0 -10.0 0.0 10.0

Tuvalu

Nauru

Micronesia, Fed. States of

Marshall Islands

Kiribati

2014p

2013p

2012e

2011

2010

2009

GDP growth (% per annum)

Group averages (2009-2014)

GDP growth 2008 2009 2010 20112012e2013p2014p

Large resource exporters (PNG, SOL, TIM) 8.7 7.1 7.8 11.0 9.8 6.3 6.9

Tourism-oriented economies (COO, PAL, VAN) 2.3 1.7 0.5 1.9 3.2 3.2 3.4

Relatively diversified South Pacific economies(FIJ, SAM, TON) 1.5 -1.4 0.4 2.0 2.2 1.7 2.1

Smallest Pacific islands (KIR, RMI, FSM, NAU, TUV) 0.0 -0.4 2.3 1.9 1.8 1.6 1.7

Inflation trends in the Pacific economies

0 3 6 9 12

Nauru

Kiribati

Fiji

Tuvalu

Vanuatu

Cook Islands

Tonga

Samoa

Marshall Islands

FSM

Palau

Solomon Islands

Papua New Guinea

Timor-Leste

Change in consumer price index (%, annual average)

0

3

6

9

2009 10 11 12e 13p 14p

Pacific region

Pacific islands

2013

2014

Inflation trends in the Pacific Economies

Policy Theme: Progress and prospects for Pacific regional economic cooperation and integration

The emergence of the ASEAN, the PRC, and India as increasingly important trading partners for South Pacific economies.

A new trade cost indicator for Pacific economies, compared to other existing indicators.

Prospects of North Pacific economies upon conclusion of their compacts of free association with the US and highlights the need to reduce aid dependency in these countries.

A contribution from the Crawford School of Public Policy examines the Caribbean’s experiences with regional cooperation and integration for possible lessons for the Pacific.

Four articles exploring the Pacific’s changing external economic ties

Asian Development Bank

www.adb.org/pacmonitor

Thank you…