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• Cook Islands economy
• Economic challenges

Cook Islands has a small but resilient economy driven mainly by tourism, which accounts for a significant portion of the Gross Domestic Product (GDP). The pristine beaches, coral reefs, tropical vegetation, and rich cultural heritage attract visitors from around the world. Tourism not only generates revenue but also provides local employment. About 50-60% of the workforce is engaged in tourism-related activities including jobs in hotels, restaurants, transportation, and other services catering to visitors. In recent years, the government has worked to diversify the tourism sector by promoting sustainable practices and developing eco-tourism initiatives, aiming to preserve the natural environment while also boosting the economy.

Seafood, particularly tuna, is the largest export and a staple diet for the local people. As part of its vast ocean territory, the Cook Islands has access to rich fishing grounds and is a member of various regional fisheries organisations that manage and conserve fish stocks. Small scale agriculture is also important for the economy. Most of the population rely on subsistence farming with coconuts, taro, bananas, and papaya being the most common crops. Despite limited arable land, farmers practice sustainable methods to maximize productivity. Manufacturing is limited to fruit-processing, clothing, and handicrafts made from local products.

Trade plays a crucial role in the Cook Islands economy, with imports outpacing exports. Top imports include food, fuel, and manufactured goods – primarily from New Zealand, Fiji, China, and Australia. Exports are mostly limited to frozen and fresh fish fillets, recreational boats, and surveying equipment. In 2024, the trade deficit was USD18.9 million, down from USD 53 million in 2022.

In recent years the economy has rebounded, following the disruptions caused by the COVID-19 pandemic, with tourism recovering strongly. However, the small size of the economy means that even minor shifts in key sectors can have disproportionate effects. In 2023, the GDP was approximately $300 million. Growth was an impressive 14% (2024), the highest of any island country in the Pacific.

Despite its economic potential, the Cook Islands is exposed to external shocks, particularly those stemming from climate change and natural disasters. As with other Pacific nations, rising sea levels and increased frequency of storms pose significant threats to infrastructure, agriculture, and tourism. The reliance on a narrow range of economic activities also means the economy is vulnerable to fluctuations in global trends and prices.

To foster economic growth, the Cook Islands government has sought to strengthen its trade relationships with regional partners and international organisations. They have also adopted initiatives to improve infrastructure, such as ports and telecommunications, and are conducting underwater exploration. With such a large Exclusive Economic Zone (EEZ), there is significant economic potential for extracting minerals.

In January 2020, Cook Islands graduated from the OECD Development Assistance Committee List of Official Development Assistance (ODA) recipients. As a high-income status country, Cook Islands is now ineligible to receive ODA. Australia allocated AUD $8 million over four years (2020-21 to 2023-24) in non-ODA funding to provide targeted assistance for Cook Islands’ participation in Australian-led regional initiatives and to support the pursuit of economic diversification.

For more information on the Cook Islands economy, see resources below:

Video

• Untold Pacific History | Episode 4: Rarotonga - The Cursed Cook Islands Hotel | RNZ

Articles

• Economic Development Strategy | MFEM
• National Accounts | Cook Islands Statistics Office
• Cook Islands: Economy | Asian Development Bank
• IMF Country Report No. 20/269 COOK ISLANDS