It said reaching 6.1%, average Gross Domestic Product (GDP) growth accelerated in 2014 for the first time in 3 years as natural gas exports began in PNG, the subregion’s largest economy, and expansion picked up in most other economies.
The notable exception was Solomon Islands, which suffered severe flooding.
In 2015, the first full year of gas production in PNG, growth in the Pacific is expected to peak at 10.7%.
Lower commodity prices will support further expansion in most economies. However, output in Vanuatu will likely contract in the wake of a cyclone in March 2015, and a drop in public spending will weigh on prospects in Timor-Leste.
Subregional growth is expected to halve to 4.5% in 2016, with only a few economies growing faster than in the previous year.
The Bank said high inflation in PNG, driven by government spending and currency depreciation, lifted the subregional average in 2014 to 5.8% despite falling energy and commodity prices. Inflation should slow to 5.5% in 2015 and 4.1% in 2016.