Republic of Palau: Selected Issues
IMF Staff Country Reports, May 6, 2014
Source details
- Canonical URL
- Republic of Palau: Selected Issues
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Bibliographic details
- Published: May 6, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484370964.002
Fiscal challenges and policy objectives
- Palau relies heavily on compact grants.
- Without continued fiscal consolidation over the medium term, the fiscal position will become unsustainable after these grants expire in FY2024.
- Policy objective: achieve long-term fiscal sustainability through consolidation and reform.
Fiscal sustainability analysis
- Methodology: intertemporal budget constraint model.
- Key quantitative finding: reducing the current deficit excluding grants by about 8 percentage points of GDP during FY2014–19 would ensure Palau’s long-term fiscal sustainability.
- Implication: sustained fiscal consolidation in the FY2014–19 period is central to avoiding unsustainability once external grants end in FY2024.
Tourism sector and growth policy priorities
- The paper discusses the role of tourism in Palau.
- Identifies policy priorities to further promote the tourism sector and sustain growth.
- Emphasis on addressing tourism volatility and enhancing tourism infrastructure and revenue.
Content in this bundle
- Republic of Palau Selected Issues; IMF Country Report No. 14/111; April 7, 2014