BY BEN BILUA
WORLD Bank says countries in the Pacific including Solomon Islands must strengthen their economic resilience by building fiscal buffers to better withstand growing global shocks.
Speaking on the current state of the global economy, Ekaterine Vashakmadze, World Bank’s senior economist for East Asia and the Pacific region, said heightened policy uncertainty is significantly impacting economic confidence and trade outlooks worldwide.
“The global economy is facing significant challenges driven by heightened policy uncertainty.
“In early 2025, global economic policy uncertainty surged, further weighing on investor confidence and global trade,” she said.
Vashakmadze noted that the Pacific region is particularly vulnerable and is projected to experience a sharper economic slowdown than previously forecast.
She attributed the economic shock to global pressures and the diminishing effects of post-pandemic recovery efforts.
Vashakmadze emphasised the need for Pacific nations to prioritize structural reforms and resilience-building strategies.
“To stay on course toward development goals, Pacific countries could benefit from reinforcing resilience and accelerating structural reforms to unlock untapped workforce potential,” she said.
Vashakmadze highlighted that a robust private sector is essential for driving productivity and long-term growth in the region.
“One approach that would help countries become economically resilient is to support the private sector to increase productivity.
“A strong private sector will definitely lead to a productive economy,” she said.
The World Bank’s call comes amid growing concerns that small island economies, such as Solomon Islands, may struggle to respond effectively to external shocks without stronger fiscal safeguards and more diversified economic strategies.
Vashakmadze’s remarks serve as a timely reminder for policymakers across the Pacific to focus on sustainable economic reforms that not only address immediate challenges but also lay the foundation for long-term resilience.
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