Republic of Nauru: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Alternate Executive Director for the Republic of Nauru

International Monetary Fund

No 2025/275, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2025 Article IV Consultation describes that the government of Nauru has made significant strides in restoring economic stability. In recent years, the government has worked closely with development partners to improve infrastructure, ensure access to banking services, and secure multi-year donor support. Growth has picked up to 2.1 percent in FY2025, mainly driven by sustained donor support and a revival of activity in the regional processing center. Fiscal outlook has improved over the medium term, following the Nauru-Australia Treaty concluded in late 2024 and the anticipated pickup of activity in the regional processing center in coming years. Risks to the growth outlook are tilted to the downside. External risks stem from the reduced foreign grants. Inflation could be higher than expected owing to volatile commodity prices, and a resurgence of food prices from delayed shipments and escalating trade tensions globally. Unexpected disruptions in banking services arising from the transition may delay payments and dampen economic activity.

Keywords: External sector vulnerabilities; government budget balance; wages; climate resilience; anti-money laundering and combating the financing of terrorism (AML/CFT); budget bill; staff appraisal; staff statement; Nauru-Australia Treaty; DAC list; External sector statistics; Global; Pacific Islands (search for similar items in EconPapers)
Pages: 81
Date: 2025-09-22
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