Growth in gross domestic product (GDP) weakened across the North Pacific. However, in the Marshall Islands, growth is seen recovering in the near term as delayed infrastructure projects resume. Along with current fiscal adjustments, stimulating the private sector through improved trade will be crucial in the North Pacific over the longer term.
Economic growth in the North Pacific was subdued in Fiscal Year 2013 (ended 30 September 2013). The economy of the Republic of the Marshall Islands (RMI) grew by only 0.8%, slowing from 3.2% in FY2012. The slowdown stems from the postponement of construction projects funded by development partners. Also, a severe drought hit the northern RMI midyear, sharply reducing harvests of food crops and copra. However, fisheries continued to perform well, with higher license fees raising revenues.
|Selected Economic Indicators (%) - Marshall Islands||2014||2015|
|Current Account Balance (share of GDP)||-20.6||-10.9|
Source: ADB estimates.
Progress in infrastructure construction is expected to drive growth in the North Pacific in the near term.
Growth in the RMI is projected to accelerate to 3.0% in FY2014 as work proceeds in earnest on delayed projects, such as the airport runway extension, funded by development partners. Recovery in agricultural production in areas affected by bad weather last year is, along with continued strong fisheries performance, expected to support growth. Growth is projected to moderate to 1.5% in FY2015 as annual decrements continue in sector grants from the United States under the Compact of Free Association, and as stimulus from public infrastructure construction wanes.
Source: ADB. 2014. Asian Development Outlook 2014. Manila.