Kiribati: Staff Report for the 2014 Article IV Consultation
IMF Staff Country Reports, May 27, 2014
Source details
- Canonical URL
- Kiribati: Staff Report for the 2014 Article IV Consultation
Other formats
Bibliographic details
- Published: May 27, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781498395212.002
Key issues and findings
- Kiribati’s key economic challenges are to reduce large structural fiscal imbalances and increase growth and employment opportunities, while facing obstacles posed by remoteness, lack of scale, vulnerabilities to external shocks and climate change.
- The significant fiscal consolidation envisaged by the authorities will help stabilize Kiribati’s sovereign wealth fund (the Revenue Equalization Reserve Fund, or RERF) in real per capita terms.
- Stabilization would require that fishing license fees remain close to recent exceptionally high levels, with windfall incomes relative to the conservative budgeted baseline saved.
- In the event of weaker fishing license fee revenues, a more ambitious adjustment in the non-fishing budget would be needed.
- The small private sector share in the economy due to remoteness and weaknesses in business climate constrains growth and puts strain on public finances.
- Climate change brings additional risks and fiscal costs.
Main recommendations
- Continue fiscal reforms designed to deliver fiscal consolidation and improved public financial management.
- Seek to maintain fishing license fees above the current conservative budget baseline, with windfalls saved to strengthen RERF balances.
- If fishing license fee windfalls cannot be sustained, explore other options to further strengthen fiscal balances.
- Continue reforms of state-owned enterprises (SOEs).
- Facilitate growth through improving the business climate and infrastructure, including through streamlining government services.
Subject focus and keywords
- Subjects: Agroindustries, Debt sustainability analysis, Economic sectors, External debt, Public and publicly-guaranteed external debt, Public debt, Public financial management (PFM)
- Keywords include: Agroindustries, Australia and New Zealand, CR, debt, economic reform operation, fishing license revenue, GDP, Global, government, ISCR, Kiribati authorities, Pacific Islands, PFTAC advisor, Public and publicly-guaranteed external debt, PV, real GDP, reform program, reform state-owned enterprises