Asia Regional Integration Center

GDP growth nearly matched 2018 growth, expanding by 4.1% in 2019. Increased capital spending connected with the Pacific Islands Forum meeting in August provided a boost. Higher spending and a steep decline in fishing receipts led to a fiscal deficit in 2019 equal to 9.8% of GDP, reversing a 34.2% surplus in 2018. Inflation in 2019 rose to 3.3%. Growth in 2020 will be affected by the impact of Cyclone Tino, which struck in January 2020, and the COVID-19 pandemic, which disrupted construction. Cyclone rehabilitation will be helped by support from multilateral organizations, but construction may be stymied by the pandemic impact. Still, growth is forecast at 2.7% in 2020 and 3.2% in 2021.