AEIR 2019/2020

Economic growth dropped from 4.4% in 2017 to 3.2% in 2018 due to a sharp decline in agriculture—caused by Cyclone Hola and a volcanic eruption on Ambae Island. Low prices for copra exacerbated a decline in output. Growth in 2018 was buoyed by services, where growth increased from 2.9% in 2017 to 3.6% in 2018 as tourism accelerated. Travel and tourism are estimated to have contributed 45% of GDP in 2018. Industrial growth remained strong as construction continued on major infrastructure projects—facilities to complement newly upgraded wharves in Port Vila and Luganville, rehabilitation of the main airport in Port Vila, outer islands airports, and road projects on multiple islands. Growth is expected to moderate to 3.0% in 2019 and 2.8% in 2020. Tourism should remain strong, but construction will likely contract with the completion of major infrastructure projects.

Source: Asian Development Outlook 2019, ADB.
Latest Month-Ago Year-Ago
Headline Inflation Rate 1 3.0 (Sep19)1.8 0.0
Merchandise Export Growth 1 -18.0 (Nov19)-18.0 -18.0
Exchange Rate Index 2 104.3 (Feb20)102.4 98.4
1 y-o-y, %.
2 Monthly average, January 2006 = 100, $/local currency.
Source: CEIC database.

Initiatives / FTAs