A new paper by SPC Statistics Advisor-Strategic Planning Monitoring Analysis, Elizabeth Ragimana and SPC Data Analysis and Dissemination Manager, David Abbott reveals how almost eighteen months on since the onset of the COVID-19 pandemic worldwide, Pacific economies are still grappling with its impact.
The paper shows that the near total collapse of tourism in the region, a key pillar of economic development for many PICTs, has led to increasing job losses, public and private sector debts and a significant reduction in government tax revenues over the period.
Samoa, Vanuatu, and the Solomon Islands each saw a 100% fall in arrival numbers against the March quarter of 2020. While Fiji (97.0%), Cook Islands (98.0%), French Polynesia (87.0%) and Guam (96.2%), were not far behind, see Figure 1.
This led to a flow on effect with slower trading and economic activities together with scaled-down business operations resulting in fiscal, economic and livelihood challenges being faced by almost everyone across the region.
For example, year-on-year government tax revenues experienced double digit declines for Cook Islands (40.2%) and Fiji (11.8%) whilst a 5% fall was seen for Solomon Islands, see Figure 2.
With depressed government budgets, year-on-year government expenditure registered double digit declines for Cook Islands (39.4%), Fiji (11.8%), and Solomon Islands (16.4%), and a 4.3% fall for Samoa, see Figure 3.
As a result of the pandemic, year-on-year public sector external debts have increased dramatically for Fiji (+17.4%), Solomon Islands (+35.3%), and Vanuatu (+43.8%) from already historically high levels.
With the pandemic still unfolding globally and its overall impact yet to be revealed, these statistics paint a startling picture, revealing the ongoing fiscal challenges to Pacific governments and to the lives and livelihoods of people across the region.
Although travel bubbles are beginning to be planned and discussed in the region, it is yet to see whether tourism will rebound quickly to restore the Pacific economies to anything approaching normality.
