Brown in Parliament on Monday said in the year to June – the most recent full year for which data is available – the Cook Islands economy grew by nine per cent in real terms.
To put this performance in context, he said the growth was more than double the International Monetary Fund’s global economic growth estimate of about four per cent for 2018.
It is also higher than the IMF’s estimate of Chinese economic growth for that year, about seven per cent, Brown added.
China has been one of the world’s fastest-growing major economy, with growth rates averaging six per cent over 30 years.
“This robust economic result is not an anomaly, but continues on as an uninterrupted run of positive growth from 2014. This has put the Cook Islands on track to be classified as a high income country by the Organisation for Economic Co-operation and Development, most likely from January 2020,” Brown said.
Tourism remains the key driver of the economy and Brown said since July to January this year, visitor arrivals in the Cook Islands reached about 169,000 which was about five per cent more than the number recorded in the previous year.
“On the back of strong tourism growth, other industry sectors such as retail and construction have also been performing well,” he said.
“Construction activity has had an additional boost from the wide range of Government infrastructure projects across the Cook Islands.”
The strong economy is generating a consistent stream of revenue, which Brown said the government was handling responsibly by closely managing growth in government expenditure.
He stated this was reflected in the Medium-Term Fiscal Framework launched by the government in December and currently being implemented in the 2019/20 Budget cycle.
“For the first time ever, the Ministry of Finance has strategically included estimates of expenditure for the coming financial year (2019/20) and following three fiscal years: 2020/21, 2021/22, 2022/23,” Brown said.
“These forward estimates are aligned to the medium-term expenditure ceilings as reflected in the fiscal framework. Although these forward estimates are only indicative and not voted by Parliament yet, they represent a critical step forward in our ability to help business and government agencies with their long term planning and to signal our continued fiscal discipline to our people, our communities and development partners.”
In addition, Brown said towards the second half of this calendar year, the Ministry of Finance and Economic Management (MFEM) will work together with the community and key stakeholders on the development of an Economic Development Strategy.
This work together with the Medium-Term Fiscal Framework will ensure that the good fortune is invested wisely, distributed fairly and not squandered, he added.
“There is no need to rely on my assessment of the Cook Islands economic and fiscal position. The Asian Development Bank's December 2018 Pacific Economic Monitor had forecast real economic growth of six per cent for the Cook Islands in 2019. Thus making the Cook Islands the highest of all the Pacific Island nations by some margin.”