MANILA, Aug. 2 (Xinhua) -- The Pacific region is forecast to post a modest 1.3 percent growth in 2011 led by stronger than expected economic growth in resource rich Timor-Leste, the Asian Development Bank (ADB) said Monday.
The latest edition of ADB's tri-annual economic review of 14 Pacific island countries showed that on back of rising government spending and higher farm production will support economic growth in Timor-Leste.
Projected 2010 economic growth in the Pacific islands remains unchanged at 0.5 percent. The Manila-based lender said that an upgrade in the projected growth in Solomon Islands, is offset by downgrades for the Cook Islands, Kiribati, Nauru, Tonga, and Vanuatu owing to weak growth in tourism sector, a main revenue earner.
Solomon Islands is expected to post 3.5 percent GDP growth, from the earlier forecast of 2 percent, in 2010, on back of the recovery in the export of timber, cocoa, fish and palm oil.
Growth projections for Papua New Guinea (PNG) remain unchanged at 5.5 percent in 2010 and 7.7 percent in 2011. The ADB said delays in the construction phase of the Liquefied Natural Gas (LNG) project have shifted some of the growth contribution of this project into 2011.
The ADB said that inflation in the region is projected to reach 5.9 percent on back of rising world oil prices. The Pacific is particularly vulnerable to rising oil prices, as the region pays more for fuel than other regions.