The global economy continues to struggle from the impact of the coronavirus disease (COVID-19) pandemic. While some economies have rebounded in the third quarter of 2020, the continued threat of COVID-19 remains the primary concern, with governments reinstating partial containment measures to deal with new outbreaks in certain areas. The latest forecast is for a 4.4% global contraction in 2020 but for a recovery in 2021 with growth of 5.2%.
The Pacific subregion reels as the pandemic devastates its economies, which rely mostly on the external sector. From the 4.3% decline forecast in July 2020, the subregional gross domestic product (GDP) forecast for 2020 has been further downgraded. The two largest economies in the Pacific - Papua New Guinea and Fiji - are expected to suffer worse than previously forecasted. With travel bans and different forms of containment measures still in place, other tourism-dependent countries such as the Cook Islands, Niue, Palau, and Vanuatu struggle to prop up their economies. Meanwhile, smaller economies that depend on imported basic commodities are suffering from bottlenecks brought about by the pandemic. The subregion is expected to recover and grow by 1.3% in 2021, contingent on how quickly travel and trade restrictions are lifted.