“In the North Pacific, growth forecasts for 2025 – 2026 are raised in the Marshall Islands and adjusted downward for the Federated States of Micronesia and Palau. In the Marshall Islands, growth is projected to pick up to 3.0% in 2025 and 3.5% in 2026; in the FSM, it is forecast to be 0.8% in 2025 and 1.1% in 2026; and in Palau, growth is now expected to reach 8.2% in 2025 and 3.9% in 2026. Inflation projections for these economies reflect international commodity price trends, but higher domestic demand can exert price pressures. Fisheries and construction sectors have contributed to a pick-up in growth in the Marshall Islands, while in Palau, tourism is recovering slowly. Utilization of financial assistance under the renewed Compact of Free Association in FSM’s larger states has been slow due to capacity constraints.”