New Caledonia Faces Economic Strain Amid Unemployment and Rising Debt
New Caledonia's economy faces severe challenges with rising unemployment and debt as riots from 2024 impact recovery efforts.
Key Points
- • Over 11,000 jobs lost in 2024; 7,000 remain unemployed as of February 2025.
- • Retail spending decreased by 14% in the first quarter of 2025.
- • Consumer debt cases have tripled in one year.
- • The nickel sector shows a 19% recovery in extraction, despite year-over-year declines.
In early 2025, New Caledonia's economy continues to exhibit signs of distress, exacerbated by the aftermath of last year’s riots that led to significant job losses and a troubling rise in over-indebtedness. Reports indicate that over 11,000 jobs were lost in 2024, with more than 7,000 people still unemployed as of February 2025. This decline has driven consumer spending down, with retail transactions decreasing by 14% in the first quarter of 2025.
The number of individuals facing financial insolvency has alarmingly tripled over the past year, highlighting the serious economic challenges the territory is grappling with. Consumer prices have increased by an average of 1.8%, with food prices rising more sharply by 5.3%. This inflation is occurring despite a marked drop in the prices of manufactured goods, which fell by 3.5%.
In the automotive sector, new vehicle registrations rose by 13.8% in the first quarter, yet they remain significantly lower than the previous year's figures, which saw a staggering 46.9% decline. The construction industry remains stagnant, with cement sales down by 48.7% year-on-year, indicating a steep drop in building activity.
On a slightly positive note, the nickel sector has reported a 19% increase in mining extraction over the last three months, although it still lags by 24% compared to this time last year. Tourism also presents a mixed picture: while cruise arrivals have surged by 109%, air travel remains significantly depressed, particularly with a 62.5% drop compared to early 2024. Overall, New Caledonia is seen as relying heavily on financial support from mainland France as it navigates through these tough economic waters.