By 2012, the Indonesian economy had recovered from the 2008 global financial crisis, with gross domestic product (GDP) growth above 6%, the debt-to-GDP ratio declining, the fiscal deficit below 2% of GDP, and the primary balance in surplus. Inflation was low in comparison to previous periods and the current account was in surplus.
In April 2014, prolonged heavy rainfall associated with tropical cyclone Ita caused severe flooding in the Solomon Islands’ capital, Honiara, and the surrounding Guadalcanal province on Guadalcanal island. The storm damaged or destroyed roads, bridges, houses, water supply systems, and other major infrastructure. The government declared a state disaster for Honiara and all of Guadalcanal.
The World Risk Report 2012 ranked Tonga, a country of 176 islands and four island groups, second only to Vanuatu in terms of vulnerability to natural disasters. Natural disasters such as tropical cyclones and storm surges have been inflicting significant losses on Tonga’s economy while also depleting its cash reserves.