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The World Bank Group’s latest Pacific Economic Update projects regional growth to slow to 2.8 percent in 2026 as rising fuel and shipping costs, supply chain disruptions, and renewed global uncertainty continue to impact Pacific economies.
The report warns that repeated external shocks are becoming the region’s “new normal,” increasing pressure on governments, businesses, and households across the Pacific.
Pacific nations remain highly exposed to fuel price shocks, with oil imports accounting for around 15 to 25 percent of merchandise imports in many countries. The World Bank says ongoing disruptions in fuel and shipping markets could slow economic growth even further over the next six to nine months.
The report also highlights growing concerns over weakening fiscal buffers, as repeated shocks continue to strain government finances.
World Bank Senior Economist Eka Vashakmadze says while the Pacific has demonstrated resilience through repeated crises, stronger economic management and long-term investment are now essential.
“Countries that invest now in reliable services and stronger economic management will be better placed to create opportunities and withstand future shocks.”
The report is calling for stronger public financial management and targeted support for vulnerable households while warning against broad subsidies that could place further strain on limited fiscal space.
