Republic of Palau: Selected Issues

Publication Date: May 06, 2014
Electronic Access: Free Full text (PDF file size is 568KB).
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Summary: This Selected Issues paper describes Palau’s fiscal challenges and policy options to achieve long-term fiscal sustainability. Palau relies heavily on compact grants, and without continued fiscal consolidation over the medium term, the fiscal position will become unsustainable after these grants expire in FY2024. The fiscal sustainability analysis uses an intertemporal budget constraint model to show that reducing the current deficit excluding grants by about 8 percentage points of GDP during FY2014–19 would ensure Palau’s long-term fiscal sustainability. The paper also discusses the role of tourism in Palau and identifies policy priorities to further promote this sector and sustain growth.
Series: Country Report No. 14/111
Subject(s): Fiscal sustainability | Tourism | Economic growth | Fiscal policy | Selected issues | Palau

Publication Date: May 06, 2014
ISBN/ISSN: 9781484370964/1934-7685 Format: Paper
Stock No: 1PLWEA2014002 Pages: 27
US$18.00 (Academic Rate:
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