Cyclones Batter Economies

Growth slumps.. . but Westpac expands.

THE ASIAN Development Bank says economic growth in the South Pacific should be slower this year because of cyclones, low commodity prices and the two military coups in Fiji.

The Manila-based bank said the economies of the Cook Islands and Van uatu would take years to recover from the impact of cyclones.

It also said political developments in Fiji had had a severe impact on tourism, production and investment, and the country’s gross domestic product its total output of goods and services had declined by more than 11 per cent last year.

The bank said the region’s balance of payments position had worsened, with combined imports up more than 11 per cent, compared with only a 2.4 per cent increase in exports.

This had aggravated foreign debt in Papua New Guinea, the Solomon Is lands and Western Samoa.

The currencies of the South Pacific island countries had generally depre ciated against major currencies other than the United States dollar.

Meanwhile, the Westpac Bank of

Australia is to acquire the business of the Hong Kong and Shanghai Banking Cor poration in the South Pacific. The deal was announced by the banks in Port Vila and is subject to the approval of the rel evant regional authorities.

Under the transfer arrangements, Westpac will take over the Hong Kong bank’s branches in Vanuatu, Fiji and the Solomon Islands.

Westpac’s chief manager for the Pa cific Islands, Mr John Stone, said in Port Vila the transfer was part of his bank’s strategy in strengthening its role in the region.

Westpac has branches in eight South Pacific countries.

Cyclone damage in the Cooks.