The World Bank has published its Pacific Economic Update, projecting regional growth to slow to 2.8 percent in 2026 as higher fuel and shipping costs, supply chain disruptions, and renewed global volatility weigh on Pacific economies. The report says repeated external shocks are becoming the region’s new normal and argues that countries need to move beyond repeated crisis response toward a jobs-first approach that strengthens long-term growth and resilience, with reliable water systems highlighted as a key enabler of business activity and employment. Pacific economies remain highly exposed to fuel shocks, with oil imports accounting for around 15 to 25 percent of merchandise imports in many countries, and the update warns that continued disruption in fuel and shipping markets could slow growth further over the next six to nine months. It sets out a pathway centered on stronger economic foundations including water, energy, transport, digital connectivity, and skills, alongside better conditions for business, market access, and access to finance and private investment. Tourism, agribusiness and fisheries, health and care services, resilient infrastructure, and digitally delivered services are identified as sectors with strong job creation potential. The report also notes that many water utilities face aging infrastructure, intermittent supply, high water losses, and rising operating costs, while successive shocks have eroded fiscal buffers, increasing the need for stronger public financial management and targeted, temporary support for vulnerable households rather than broad-based subsidies.
World Bank 2026-05-11
World Bank projects Pacific growth to slow to 2.8 percent in 2026 and sets out a jobs first resilience agenda
The World Bank’s Pacific Economic Update projects regional growth slowing to 2.8 percent in 2026 as higher fuel and shipping costs, supply chain disruptions, and global volatility weigh on fuel‑dependent Pacific economies. It urges shifting from repeated crisis response to a jobs‑first strategy that strengthens water, energy, transport, digital connectivity, skills, business conditions, market access, and access to finance and private investment. The report highlights reliable water systems as critical for employment, identifies tourism, agribusiness and fisheries, health and care services, resilient infrastructure, and digital services as key job‑creating sectors, and calls for stronger public financial management and targeted, temporary support for vulnerable households instead of broad subsidies.