28 May 2012

Potential commodities slowdown will affect Pacific countries differently

6:08 am on 28 May 2012

The World Bank's lead economist for the Pacific says potentially slowing commodity prices will aid the recovery of small Pacific countries but could hamper the growth of bigger economies such as Papua New Guinea.

The comment follows the release of the bank's latest economic update on East Asia and the Pacific, which puts last year's growth in the region, excluding China, at four point three percent.

The report, "Capturing New Sources of Growth", predicts five point two percent regional growth for next year and Vivek Suri says import-reliant Pacific countries could use the slowdown to consolidate their recovery.

"The countries of the Pacific are quite different so when one talks about the impact of what could potentially be slowing commodity prices, that might pass on to some of our Pacific countries like Papua New Guinea and Solomon Islands. So that message which applies to Mongolia and other parts of East Asia would apply to such countries in the Pacific."

Vivek Suri says one way Pacific countries can protect themselves from global economic shocks is by continuing to reform and strengthen economic policy.