Tourism-dependent economies such as Palau are expected to see growth in 2023, according to the latest World Bank report.
The report stated, “after seeing almost no tourism activity in 2020, 2021, and much of 2022, tourism numbers are on the rise in many Pacific economies, already driving economic growth.”
Palau is to see 18 percent growth in 2023 due to the resurgent of tourism, much faster growth compared to other Pacific Island nations, it added.
“After another year of negative growth in 2022, Palau’s economy is set to rebound this year continuing into 2024. Tourism was low in 2022. This was primarily driven by a lack of direct flights into Palau and a continued weak recovery in Palau’s tourism source markets. “
The World Bank also forecasts that as direct flight routes resume and markets improve, tourism growth in 2023 is expected to drive a strong recovery in Palau.
But Palau’s debt-to-GDP ratio has climbed to over 90 percent of GDP, limiting its capacity to respond to future shock, the report noted.
The Pacific Island nations are also affected by higher inflation, with Palau expected to see higher inflation rates of 8.9 and 8.1