{ "title": "IMF Executive Board Concludes 2024 Article IV Consultation with Kiribati", "publication": "IMF News, May 10, 2024", "sourceUrl": "https://www.imf.org/en/news/articles/2024/05/09/pr24151-kiribati-imf-exec-board-concludes-2024-art-iv-consult", "canonical": "https://www.imf.org/en/news/articles/2024/05/09/pr24151-kiribati-imf-exec-board-concludes-2024-art-iv-consult", "overlayPath": "/en/news/articles/2024/05/09/pr24151-kiribati-imf-exec-board-concludes-2024-art-iv-consult/index.md", "summary": "Washington, DC – May 10, 2024: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Kiribati.", "publishDate": "2024-05-10", "sections": [ { "heading": "Overview and recent developments", "content": "- The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Kiribati.\n- The economy strengthened after the removal of all COVID-19 restrictions in the second half of 2022.\n- Drivers of improved 2023 performance: resumption of infrastructure projects, improved weather conditions, supportive fiscal measures, and a recovery in international arrivals.\n- Growth is estimated to have improved to 4.2 percent in 2023 from 3.9 percent in 2022.\n- Inflation has decelerated from its recent peak, driven by the moderation of global commodity prices, improved supply-side conditions, and base effects.\n- The current account is estimated to shift back to a surplus of 10.2 percent of GDP in 2023, buoyed by a resurgence in fishing license fees, a rise in remittances, and a decline in global commodity prices." }, { "heading": "Outlook and key projections", "content": "- Real GDP growth is projected at 5.8 percent in 2024, primarily driven by higher consumption following a 38 percent increase in civil service wages.\n- Headline inflation is projected to average 4.5 percent in 2024, largely driven by increased domestic demand.\n- The current account is expected to remain in surplus over the medium term, but the surplus will remain below its historical average due to:\n - An increase in imports required for domestic consumption and infrastructure projects.\n - A gradual decline in fishing license fees as a percent of GDP.\n- Risks to the outlook are tilted to the downside and include:\n - An intensification of regional conflicts.\n - Deepening geo-economic fragmentation.\n - An abrupt global slowdown.\n - Commodity price volatility.\n - Higher demand-driven inflation.\n - Climate change." }, { "heading": "Executive Board assessment — main messages and policy advice", "content": "- Directors welcomed the strong economic recovery supported by fiscal policies and increased infrastructure investment.\n- Key vulnerabilities: Kiribati is a small island economy vulnerable to global shocks and climate change.\n- Policy priorities emphasized by Directors:\n - Implement sound policy measures and structural reforms, supported by capacity development, to:\n - Enhance private sector led growth.\n - Promote fiscal and debt sustainability.\n - Enhance inclusiveness and climate resilience.\n - Fiscal consolidation is crucial for safeguarding fiscal and debt sustainability.\n - Enhance revenue mobilization given uncertainties related to fishing revenue and external grants and substantial climate adaptation needs.\n - Rationalize recurrent expenditure, including:\n - Addressing the elevated public wage bill.\n - Streamlining the copra subsidy.\n - Improving the targeting and efficiency of social protection payments.\n - Formulate a sustainable fiscal framework to promote fiscal discipline.\n - Promptly reform the sovereign wealth fund withdrawal rule to help preserve the fund’s real value and facilitate budget planning.\n - A few Directors saw merit in easing the withdrawal rule to allocate more resources toward infrastructure investment while preserving the value of the fund.\n - Bolster institutional and administrative capacity and further enhance public financial management.\n - Strengthen state owned enterprises’ governance and transparency, including enhancing their commercial mandate and financial viability.\n - Step up structural reforms to address drivers of the economy’s fragility and foster development:\n - Close the infrastructure gap and improve internet connectivity.\n - Expand private sector employment and investment, upgrade exports, close human capital and gender gaps, and strengthen institutions and governance.\n - Improve financial regulation and support financial inclusion, including prompt operationalization of the Kiribati Financial Supervisory Authority.\n - Invest in adaptation and secure climate finance; bolster sustainable utilization of natural resources and finalize the Environment Act and the Fisheries Act." }, { "heading": "Fiscal, reserves, and balance sheet highlights (selected)", "content": "- Per capita GDP (2022): US$2,199.\n- Population (2022): 123,375.\n- Life expectancy at birth (2020): 67.3.\n- Poverty (2019):\n - Below $2.15 a day: 1.7.\n - Below the national poverty line: 21.9.\n- Inequality (2019, income shares):\n - Top 10 percent: 22.9.\n - Bottom 20 percent: 9.5.\n- IMF quota: SDR 11.2 million.\n- Main export products: Frozen yellowfin tunas, crude coconut oil, self-propelled works trucks, petroleum oil, and copra." }, { "heading": "Selected economic indicators, 2020–29 (highlights from table)", "content": "- Real GDP (percent change): 2020: -0.6; 2021: 8.5; 2022: 3.9; 2023 Est.: 4.2; 2024 Proj.: 5.8; 2025 Proj.: 4.1; 2026 Proj.: 3.3; 2027 Proj.: 2.5; 2028 Proj.: 2.1; 2029 Proj.: (value not listed).\n- Consumer prices (percent change, average): 2020: 2.6; 2021: 5.3; 2022: 9.3; 2023 Est.: 4.5; 2024 Proj.: 3.0; 2025 Proj.: 2.0; 2026 Proj.: 1.9; 2027 Proj.: 1.8.\n- Inflation (end of period): 2020: 2.8; 2021: 16.2; 2022: -2.1; 2023 Est.: 4.8.\n- Central government finance (in percent of GDP), selected rows:\n - Revenue and grants: 2020: 105; 2021: 72; 2022: 69; 2023 Est.: 101; 2024 Proj.: 103; 2025 Proj.: 92; 2026 Proj.: 82; 2027 Proj.: 91; 2028 Proj.: 88; 2029 Proj.: 87.\n - Total domestic revenue: 2020: 75; 2021: 64; 2022: 56; 2023 Est.: 71; 2024 Proj.: 65; 2025 Proj.: 63; 2026 Proj.: 62.\n - Of which: fishing revenue: 2020: 57; 2021: 44; 2022: 36; 2023 Est.: 51; 2024 Proj.: 46; 2025 Proj.: 43; 2026 Proj.: 42; 2027 Proj.: 41.\n - External grants: 2020: 30; 2021: 8; 2022: 13; 2023 Est.: 39; 2024 Proj.: 29; 2025 Proj.: 19; 2026 Proj.: 28; 2027 Proj.: 26.\n - Expenditures: 2020: 83; 2021: 102; 2022: 126; 2023 Est.: 107; 2024 Proj.: 95; 2025 Proj.: 104.\n - Current expenditures: 2020: 67; 2021: 73; 2022: 70; 2023 Est.: 68.\n - Development expenditures: 2020: 16; 2021: 21; 2022: 31; 2023 Est.: 53; 2024 Proj.: 35; 2025 Proj.: 25.\n - Domestic recurrent balance 1/: 2020: -45; 2021: -47; 2022: -51; 2023 Est.: -54; 2024 Proj.: -53; 2025 Proj.: -50; 2026 Proj.: -49; 2027 Proj.: -48.\n - Recurrent fiscal balance (incl. budget support grants): 2020: 14; 2021: -2; 2022: -7; 2023 Est.: -4; 2024 Proj.: -5; 2025 Proj.: -6.\n - Overall balance 2/: 2020: 4; 2021: -11; 2022: -18; 2023 Est.: -1; 2024 Proj.: -22; 2025 Proj.: -15; 2026 Proj.: -13; 2027 Proj.: -14; 2028 Proj.: -16.\n- Financing and reserves:\n - Of which: Revenue Equalization Reserve Fund (RERF) flows and closing balances are presented in the table; RERF closing balance (in millions of A$): 2020: 1172; 2021: 1353; 2022: 1194; 2023 Est.: 1389; 2024 Proj.: 1414; 2025 Proj.: 1475; 2026 Proj.: 1529; 2027 Proj.: 1579; 2028 Proj.: 1642; 2029 Proj.: 1714.\n - Per capita value (in 2006 A$): 2020: 7264; 2021: 8018; 2022: 6530; 2023 Est.: 7080; 2024 Proj.: 6835; 2025 Proj.: 6803; 2026 Proj.: 6772; 2027 Proj.: 6717; 2028 Proj.: 6710; 2029 Proj.: 6729.\n - Cash reserve buffer 3/: values and closing balance percentages provided in the table; in excess of 3-months of current spending and LCDF (in millions of A$): 219; 144; 124; 108; 61; 40 (years not individually labeled in table excerpt).\n- Balance of payments:\n - Current account including official transfers (in millions of US$): 2020: 20.3; 2021: -6.5; 2022: 28.6; 2023 Est.: 30.2; 2024 Proj.: 30.4; 2025 Proj.: 29.2; 2026 Proj.: 29.4; 2027 Proj.: 30.5; 2028 Proj.: 31.3; 2029 Proj.: 31.8.\n - Current account (percent of GDP): 2020: 7.0; 2021: -2.4; 2022: 10.2; 2023 Est.: 9.7; 2024 Proj.: 9.2; 2025 Proj.: 8.4; 2026 Proj.: 8.1; 2027 Proj.: 8.0; 2028 Proj.: 7.9.\n- External debt (in millions of US$) 4/: 2020: 32; 2021: 78; 2022: 135.\n- External debt service (in millions of US$): 2.3; 2.2; 2.7; 2.9 (table lists these values without year labels in excerpt).\n- External debt service (In percent of exports of goods and services): 1.3; 1.0; 0.9; 0.8; 0.7 (table lists these values without year labels in excerpt).\n- Memorandum items:\n - Nominal GDP (in millions of A$): 2020: 324; 2021: 385; 2022: 390; 2023 Est.: 420; 2024 Proj.: 470; 2025 Proj.: 501; 2026 Proj.: 528; 2027 Proj.: 551; 2028 Proj.: 572; 2029 Proj.: 595.\n - Nominal GDP (in millions of US$): 2020: 224; 2021: 271; 2022: 279; 2023 Est.: 311; 2024 Proj.: 329; 2025 Proj.: 342; 2026 Proj.: 354; 2027 Proj.: 366; 2028 Proj.: 382.\n\nIMF Communications Department; Press Release No. 24/151; May 10, 2024. \n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Kiribati and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/05/09/pr24151-kiribati-imf-exec-board-concludes-2024-art-iv-consult" } ], "bullets": [ "[Markdown version](/en/news/articles/2024/05/09/pr24151-kiribati-imf-exec-board-concludes-2024-art-iv-consult/index.md)", "[Structured JSON version](/en/news/articles/2024/05/09/pr24151-kiribati-imf-exec-board-concludes-2024-art-iv-consult/index.json)", "[Bundle manifest](/en/news/articles/2024/05/09/pr24151-kiribati-imf-exec-board-concludes-2024-art-iv-consult/bundle-manifest.json)", "Published: May 10, 2024", "The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Kiribati.", "The economy strengthened after the removal of all COVID-19 restrictions in the second half of 2022.", "Drivers of improved 2023 performance: resumption of infrastructure projects, improved weather conditions, supportive fiscal measures, and a recovery in international arrivals.", "Growth is estimated to have improved to 4.2 percent in 2023 from 3.9 percent in 2022.", "Inflation has decelerated from its recent peak, driven by the moderation of global commodity prices, improved supply-side conditions, and base effects.", "The current account is estimated to shift back to a surplus of 10.2 percent of GDP in 2023, buoyed by a resurgence in fishing license fees, a rise in remittances, and a decline in global commodity prices.", "Real GDP growth is projected at 5.8 percent in 2024, primarily driven by higher consumption following a 38 percent increase in civil service wages.", "Headline inflation is projected to average 4.5 percent in 2024, largely driven by increased domestic demand.", "The current account is expected to remain in surplus over the medium term, but the surplus will remain below its historical average due to:", "Risks to the outlook are tilted to the downside and include:", "Directors welcomed the strong economic recovery supported by fiscal policies and increased infrastructure investment.", "Key vulnerabilities: Kiribati is a small island economy vulnerable to global shocks and climate change.", "Policy priorities emphasized by Directors:", "Per capita GDP (2022): US$2,199.", "Population (2022): 123,375.", "Life expectancy at birth (2020): 67.3.", "Poverty (2019):", "Inequality (2019, income shares):", "IMF quota: SDR 11.2 million.", "Main export products: Frozen yellowfin tunas, crude coconut oil, self-propelled works trucks, petroleum oil, and copra.", "Real GDP (percent change): 2020: -0.6; 2021: 8.5; 2022: 3.9; 2023 Est.: 4.2; 2024 Proj.: 5.8; 2025 Proj.: 4.1; 2026 Proj.: 3.3; 2027 Proj.: 2.5; 2028 Proj.: 2.1; 2029 Proj.: (value not listed).", "Consumer prices (percent change, average): 2020: 2.6; 2021: 5.3; 2022: 9.3; 2023 Est.: 4.5; 2024 Proj.: 3.0; 2025 Proj.: 2.0; 2026 Proj.: 1.9; 2027 Proj.: 1.8.", "Inflation (end of period): 2020: 2.8; 2021: 16.2; 2022: -2.1; 2023 Est.: 4.8.", "Central government finance (in percent of GDP), selected rows:", "Financing and reserves:", "Balance of payments:", "External debt (in millions of US$) 4/: 2020: 32; 2021: 78; 2022: 135.", "External debt service (in millions of US$): 2.3; 2.2; 2.7; 2.9 (table lists these values without year labels in excerpt).", "External debt service (In percent of exports of goods and services): 1.3; 1.0; 0.9; 0.8; 0.7 (table lists these values without year labels in excerpt).", "Memorandum items:", "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)", "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)", "[Kiribati and the IMF](http://www.imf.org/external/country/KIR/index.htm)", "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2024/05/09/pr24151-kiribati-imf-exec-board-concludes-2024-art-iv-consult/index.md", "json": "/en/news/articles/2024/05/09/pr24151-kiribati-imf-exec-board-concludes-2024-art-iv-consult/index.json", "bundleManifest": "/en/news/articles/2024/05/09/pr24151-kiribati-imf-exec-board-concludes-2024-art-iv-consult/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T02:58:05.185Z" }