Press Release: IMF Staff Concludes 2016 Article IV Mission to Tuvalu
IMF News, May 31, 2016
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Bibliographic details
- Published: May 31, 2016
Mission timing and contacts
- Press Release No. 16/256
- Date: May 31, 2016
- IMF Communications Department, Media Relations
- E-mail: media@imf.org
- Phone: 202-623-7100
- IMF team led by Dan Nyberg visited Tuvalu during May 19â30 for the 2016 Article IV Consultation.
- World Bank staff joined the mission.
Macroeconomic outlook and projections
- Real GDP growth in 2015 is estimated at 2.6 percent.
- Real GDP growth is projected to rise to 4 percent in 2016 on account of several large infrastructure projects and recovery spending following Cyclone Pam.
- Inflation remained steady in 2015 at 3.2 percent.
- Inflation is expected to rise slightly in 2016 to 3.5 percent as economic activity picks up.
Fiscal performance and outlook
- The budget achieved a substantial surplus in 2015 for the fourth consecutive year, supported by:
- strong fishing license fees,
- internet license fees related to the â.tvâ domain,
- development partner assistance.
- With four years of budget surpluses, fiscal buffers have been rebuilt and remain at a comfortable level.
- A moderate deficit is projected in 2016 as expenditures will remain elevated, partly owing to continued Cyclone Pam recovery spending.
Risks to the outlook
- Risks identified by staff include:
- the effects of climate change,
- volatility in fishing revenues,
- a global financial downturn, which could affect distributions to the budget from the Tuvalu Trust Fund.
Policy implications and recommendations
- Preserve fiscal space to enable continued climate change mitigation investment and safeguard sustainability.
- Continue recurrent expenditure restraint to maintain recent performance.
- Implement effective public enterprise reform through enhanced governance and regulatory frameworks.
Stakeholder engagement
- During the visit, the team met with the Minister of Finance, Hon. Maatia Toafa, and other senior public officials, as well as representatives from the private sector, public enterprises, development partners, and civil society.
- The team expressed appreciation to the authorities and other stakeholders for the constructive discussions.
International Monetary Fund