The ongoing sovereign debt crisis in the Eurozone is likely to have very limited impact on the Pacific countries as the region's growth prospects are more closely linked to Australia and New Zealand, a report by the Asian Development Bank (ADB) showed Wednesday.
The bank, however, warned that the region is likely to experience some indirect impacts through trade and investment links between the European Union and the partners of the Pacific economies, falling values of the Pacific's trust funds and the weakening tourism industry.
The report showed that fiscal balances of governments in the Pacific improved in 2011 with many governments exceeding their revenue targets. In 2012 also revenue increases are expected to exceed expenditure growth as many countries in the region are developing new revenue measures to strengthen government finances.
"The Pacific economies' progress in fiscal consolidation is commendable," Robert Wihtol, director general of ADB's Pacific Department, said. "But it is important that governments sustain these efforts to increase their ability to maneuver in case of shocks arising from the eurozone situation."
by RTT Staff Writer
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