CANBERRA (Pacnews) — A United Nations study says South Pacific economic growth is being challenged by rising oil prices and political instability.
The annual survey by the United Nations Economic and Social Commission for Asia and the Pacific reports positive economic growth across the islands last year reflected global trends.
Growth ranged from under two percent in Tonga to more than six percent in Vanuatu.
ESCAP said the growth was led by the primary sector in Papua New Guinea and services industries in smaller island countries.
However. the U.N. body warns that political instability in some island states threatens not only tourism but also agriculture, construction and financial services.
The report also said a 250 percent rise in the cost of petrol has caused sharply higher import bills, reducing Pacific incomes and stoking inflation.
It also points to what it calls the alarmingly rapid pace of urbanization, as remote populations across the south Pacific shift to bigger cities.