## IMF Executive Board Concludes 2025 Article IV Consultation with Kiribati _IMF News, July 10, 2025_ ## Source details **Canonical URL:** [IMF Executive Board Concludes 2025 Article IV Consultation with Kiribati](https://www.imf.org/en/news/articles/2025/07/10/pr25247-kiribati-imf-executive-board-concludes-2025-article-iv-consultation) ## Other formats - [Markdown version](/en/news/articles/2025/07/10/pr25247-kiribati-imf-executive-board-concludes-2025-article-iv-consultation/index.md) - [Structured JSON version](/en/news/articles/2025/07/10/pr25247-kiribati-imf-executive-board-concludes-2025-article-iv-consultation/index.json) - [Bundle manifest](/en/news/articles/2025/07/10/pr25247-kiribati-imf-executive-board-concludes-2025-article-iv-consultation/bundle-manifest.json) ## Bibliographic details - Published: July 10, 2025 --- ### Key findings on recent performance and outlook - Real GDP grew by an estimated 5.3 percent in 2024 and is now close to its pre-COVID trend. - Real GDP growth is expected to moderate to around 3.9 percent in 2025 and to gradually decline to around 2 percent over the medium term. - Inflation: - Moderated in 2024 in line with global commodity prices. - Has started to rise in 2025Q1 due to long-overdue increases in fuel prices and electricity tariffs. - Inflation is expected to increase to 7.8 percent in 2025 and then moderate over the medium term, in line with trading partners’ inflation. - Drivers of 2025 activity: largely public consumption and continuation of infrastructure projects. - Current account: expected to narrow to 0.6 percent of GDP in 2025, mostly owing to lower global commodity prices. - Fiscal: fiscal policy was expansionary in 2024; the fiscal deficit is projected to narrow in 2025, thanks to efforts to contain current expenditures. - External position in 2024 is assessed to be weaker than the level implied by fundamentals and desirable policies, with government spending contributing to high demand for imports. ### Executive Board assessment and risks - The Kiribati economy has been resilient, despite repeated shocks. - Global trade policy changes in 2025 are expected to have only a small impact on GDP growth in the baseline, given Kiribati’s limited exports of goods and services. - Significant increases in the electricity tariff and fuel price in 2025 were needed to align them with market prices and are projected to temporarily increase inflation. - Risks have increased and are tilted to the downside: - Domestic risk: under the current return-based withdrawal rule, weak financial market returns in 2025 could jeopardize the sovereign wealth fund withdrawal budgeted for 2026, possibly forcing an unplanned fiscal consolidation and a decline in public investment. - External risks: commodity price volatility; intensification of conflicts that could raise shipping costs; systemic financial instability — all could increase risks to fiscal and external sustainability via effects on the import bill, sovereign wealth fund interest revenues, remittances, and growth. - Climate vulnerability: Kiribati remains highly vulnerable to the effects of climate change and natural disasters. ### Policy recommendations — fiscal framework and RERF management - Integrate countercyclical fiscal policy with a balance-based RERF withdrawal rule to better meet development needs and provide social benefits. - Integrate RERF withdrawals and deposits into a more developed medium-term fiscal framework to offset revenue volatility and support macroeconomic stabilization. - Adjust the RERF withdrawal rule so that annual withdrawals are capped at 3 to 5 percent of the RERF balance to preserve RERF’s long-term value and ensure withdrawals remain possible even when RERF returns are low. - A credible fiscal consolidation over the medium term, accompanied by improved public investment efficiency, is needed to anchor debt and support higher investment in climate adaptation. - Consolidation measures already implemented in 2025 and recommended further steps: - Implemented in 2025: freezing nominal wages, reforming VAT, and streamlining subsidies. - Further measures: gradually reduce SOE and other tax exemptions; increase the excise tax rate; enhance fishing revenue; further rationalize copra subsidies; streamline SOE subsidies. ### Policy recommendations — public investment, debt, and governance - To improve public investment efficiency: - Supplement the prioritized list of infrastructure projects with detailed costing, timelines, and transparent criteria for project selection. - Plan to integrate the recurrent budget with the development budget. - Enhance oversight and procurement procedures and maintain a fixed asset register. - Establish a debt management framework with strong governance, transparency, and accountability: - Strengthen capacity to analyze and manage potential new debt and assess sources of risk. - Clarify the purposes of new borrowing or issuing guarantees and ensure consistency with debt sustainability and development priorities, with a requirement of detailed annual reporting. - Maintain or expand access to grants and highly concessional loans to finance infrastructure investment as the preferred way to preserve debt sustainability. ### Policy recommendations — institutions, human capital, and statistics - Strengthen institutional capacity and raise human capital: - Continue fiscal structural reforms focused on public financial management and revenue administration. - Continue building monetary and financial sector regulatory and supervisory institutions and make the new Kiribati Financial Supervisory Authorities fully operational. - Improve quality of education and health to strengthen the labor force and public health. - Enhance financial inclusion, the business regulatory environment, and quality of infrastructure to promote private sector development. - Continue capacity building to enhance the quality of national statistics: - Address shortcomings in real and external sector statistics and government finance statistics. - Gradually address new challenges related to the recording of Joint Venture activities through capacity development by PFTAC and other development partners. ### Key statistics and projections (selected) - Per capita GDP (2024e): US$2,419. - Population (2024e): 127,317. - Life expectancy at birth (2022): 67.7. - Poverty (2019): Below $2.15 a day: 1.7 percent; Below the national poverty line: 21.9 percent. - Inequality (2019, income shares): Top 10 percent: 22.9; Bottom 20 percent: 9.5. - IMF quota: SDR 11.2 million. - Main export products: Frozen yellowfin tunas, crude coconut oil, self-propelled works trucks, petroleum oil, and copra. - Selected macro indicators (2024–25): - Real GDP (percent change): 2024: 5.3; 2025 proj.: 3.9. - Inflation (percent change, average): 2024: 3.0. - Inflation (end of period): 2024: 6.5. - Current account including official transfers (in percent of GDP): 2024: -2.0; 2025 proj.: -0.6. - RERF closing balance (in millions of A$): 2024: 1509; 2025 proj.: 1540. - Nominal GDP (in millions of A$): 2024: 467; 2025 proj.: 498. - Nominal GDP (in millions of US$): 2024: 308; 2025 proj.: 313. *Press Release No. 25/247, July 10, 2025.* --- ## References - [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/) - [https://www.imf.org/en/home](https://www.imf.org/en/home) _Source: https://www.imf.org/en/news/articles/2025/07/10/pr25247-kiribati-imf-executive-board-concludes-2025-article-iv-consultation_