Pacific Islands Forum Deputy Secretary General, Desna Solofa has warned that the Pacific faces mounting economic pressures from global geopolitical instability and rising fuel and shipping costs, saying regional economic integration is now essential to strengthen resilience and sustain growth.
Speaking at the 2026 Forum Economic Officials Meeting in Majuro on Monday, Solofa said the annual Forum Economic Ministers’ Meeting (FEMM) provides an opportunity for the Secretariat to update ministers and senior officials on achievements over the past year, assess emerging challenges, and outline strategic priorities for the year ahead.
She said that while many economies have recovered to pre-pandemic levels, the global economic environment remains difficult.
“Recent fuel supply disruptions and surges in fuel and energy prices have highlighted the Pacific’s vulnerability to external shocks.
These are having significant implications for energy security, transportation costs, inflation, economic growth and the livelihoods of our people across the region. This will require a coordinated regional response rather than a narrow fuel-price intervention,” she said.
Solofa said the Pacific continues to attract increasing geopolitical attention from traditional and emerging political and development partners, while economic recovery momentum has been weakened by recent global developments.
“As highlighted in the Regional Economic Outlook, Forum Island Countries had been on a steady path of recovery following the COVID-19 pandemic. However, recent geopolitical developments, particularly the conflict involving Iran, have once again dampened global economic prospects and slowed recovery momentum,” she told FEMM officials.
She noted that the Middle East conflict reached its 108th day on 15 June 2026 and that although the reopening of the Strait of Hormuz had been announced, with a formal agreement expected to be signed on 19 June 2026, the economic effects of the crisis continue to be felt globally.
“The regional macroeconomic environment remains fragile,” said Solofa.
According to the World Bank’s Pacific Economic Update released in May 2026, Solofa said Pacific Island countries remain among those most affected by the conflict despite having no direct involvement.
“Regional economic growth is now projected to average only 2.8 percent, down from the earlier forecast of 3.2 percent. Rising fuel and shipping costs, supply chain disruptions, and heightened global uncertainty have increased inflationary pressures and placed additional strain on government budgets and external balances across the region,” Solofa explained.
She said that while easing geopolitical tensions may provide some relief, higher costs have already flowed through to businesses, government budgets and consumers.
“Encouragingly, tourism performance through April 2026 has been more resilient than initially anticipated, underpinning growth in several tourism-dependent economies. Nevertheless, the outlook remains uncertain and will depend largely on the effective implementation and durability of the ceasefire arrangement and broader global economic conditions, especially developments in global oil prices,” she stressed.
Solofa said the challenges facing the region require a more ambitious response.
“These conditions make one point clear: incremental adjustments are no longer sufficient. The scale and nature of the challenges we face require a more ambitious, transformational response. Business as usual will not deliver the resilience, growth and sustainability our region now demands,” she said.
Solofa said the Pacific’s ongoing vulnerabilities highlight the need for long-term coordinated action to improve economic stability and resilience.
“The 2050 Strategy for the Blue Pacific Continent provides our long-term vision for a resilient, secure and prosperous region”.
She said the Pacific Roadmap for Economic Development (PRED), endorsed by Economic Ministers in 2025 and welcomed by Leaders, translates that vision into a coordinated regional economic agenda.
“The PRED reflects a shared understanding that resilience and prosperity cannot be achieved through fragmented national approaches alone.”
Solofa said recent global shocks have demonstrated the limitations of fragmented responses and reinforced the need for stronger regional cooperation.
“Accordingly, regional economic integration is now not just important; it is essential. Recent global shocks, including disruptions in energy and supply chains, have reinforced the limits of fragmented responses and highlighted the urgency of deeper and meaningful integration to deliver more effective and resilient outcomes for our economies,” she said.
Solofa said the FEMM agenda had been structured to ensure implementation of the Pacific Roadmap for Economic Development.
“The FEMM agenda has been deliberately designed to demonstrate the PRED in implementation, ensuring that agreed regional priorities are translated into coordinated and practical action,” she said.
