North Pacific Growth Outlook Up as Palau Tourism Climbs
OREANDA-NEWS. Growth in the North Pacific is expected to rise in the near term due to favorable external conditions, stimulus from infrastructure projects, and continued tourism growth in Palau, says a new report from Asian Development Bank (ADB) today.
ADB’s flagship annual economic publication Asian Development Outlook 2015 (ADO), forecasts GDP growth in Palau to accelerate to 8% in fiscal year 2015 on increased tourism, hotel construction, stimulus from higher public infrastructure spending, and improvements in the external economic environment.
"Palau's tourism sector has performed strongly, but challenges remain in terms of safeguarding the sustainability of the natural environment that attracts tourists in the first place, and also ensuring that most Palauans benefit from tourism-led development", said ADB Pacific Department Director Emma Veve. "To follow along a similar path, the RMI and the FSM could start by exploring cost-effective means to improve air services and boost their own tourism potentials."
Although a surge in tourism numbers provides growth opportunities for Palau, there are rising concerns among policymakers and many stakeholders about how many new visitors can be accommodated in available accommodation, as well as the carrying capacity of tourist sites and public infrastructure in the island nation. Growth in visitor arrivals is likely to taper off slightly next year, but is still likely to remain strong.
Economic growth in RMI and FSM was subdued last year, but progress in infrastructure project implementation is seen to push up GDP growth in the RMI to 3.5% in 2015, and 2.3% in the FSM. Growth in the RMI is expected to moderate next year as project stimulus wanes. In contrast, the FSM’s growth is projected to accelerate sharply with a ramping up in project construction.
ADB has provided a range of development assistance to the North Pacific, including grants, loans, and technical assistance. Since 1990, the RMI has received 14 loans amounting to \$92.6 million, 48 technical assistance projects of \$21.1 million, and three grants worth \$2.1 million. The FSM has received 10 loans totaling \$84.2 million and 49 technical assistance projects of \$26.7 million. Since partnering with Palau in 2003, ADB has approved four loans amounting to \$44.8 million, and five technical assistance projects of \$3.3 million.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region.
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