Tuvalu: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Tuvalu

International Monetary Fund

No 2023/267, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2023 Article IV Consultation discusses that a successful vaccination strategy allowed Tuvalu to lift coronavirus disease (COVID) containment measures at the end of 2022, but the economic cost of the pandemic has been significant. Real gross domestic product growth was -4.3 percent in 2020, with at-the-border containment measures leading to delays in much-needed infrastructure projects. Growth is expected to accelerate as the lifting of COVID restrictions leads to the resumption of construction activity, shipping bottlenecks ease and the trade and hospitality sectors recover. Tuvalu is among the countries most vulnerable to the effects of climate change; its remote economy is dominated by the public sector; and its revenue base is narrow, with reliance on donor commitments further complicating fiscal planning. The economic setback due to the pandemic makes addressing these significant structural challenges more difficult. The report recommends promoting fiscal sustainability and building buffers by mobilizing revenues and rationalizing current expenditures.

Keywords: fund surveillance; adaptation plan; fund advice; Tuvalu's legal tender; CPI expenditure weight; Natural disasters; Debt sustainability analysis; Global; Asia and Pacific; Pacific Islands (search for similar items in EconPapers)
Pages: 81
Date: 2023-07-21
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