However, with many claims due in 2000, net private capital flows may slow. Eight of the 12 Pacific economies recorded higher growth rates in 1999 than in 1998. Fiscal and monetary policies were generally consistent with maintaining macroeconomic balances, except in Papua New Guinea. Economic prospects for the subregion in the short to medium term will depend on the success of public sector reforms, sustained macroeconomic stabilization, and private sector development. The region remains vulnerable to external shocks, both economic and climatic.
More effort is needed to preserve fragile environments and improve water supply.