The Asian Development Bank's latest financial report on the Pacific shows a much more positive outlook for the region.
A senior country specialist for the ADB in Suva, Emma Veve, says there are some real signs of recovery in Pacific countries in the last few months of 2010.
But she cautions governments to manage and balance revenue and expenditure carefully to ensure there is not an over-reliance on debt to fund budget deficits.
She says four countries in particular need to make sure fiscal deficits don't get out of hand.
"Countries such as Fiji, Kiribati, Tonga and Tuvalu have got significant deficits that they need to work hard to turn around in future years. So the fiscal position in those countries needs a lot of work on it in the coming year, to ensure that they move to a sustainable position."
Emma Veve says Tonga has been hit hard by a drastic fall in remittances which usually make up a third of the country's economic activity.