IMF Executive Board Concludes 2025 Article IV Consultation with Tuvalu
IMF News, September 12, 2025
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Bibliographic details
- Published: September 12, 2025
Overview
- The Executive Board completed the Article IV Consultation for Tuvalu on September 3rd, 2025.
- Press Release No. 25/293; publication date on the page: September 12, 2025.
- Media relations: PRESS OFFICER: Pavis Devahasadin; Phone: +1 202 623-7100; Email: MEDIA@IMF.org; @IMFSpokesperson
Economic recovery and inflation
- Tuvalu’s economy is recovering from the COVID-19 pandemic after a sharp contraction during 2020-22.
- Real GDP growth:
- 2023: 4.0 percent
- 2024: 3.1 percent
- Inflation:
- pandemic peak of 14 percent in 2022Q3
- 2024: 1.2 percent
- easing attributed to global commodity prices and easing of shipping bottlenecks
Outlook and growth projections
- Short-term projections:
- 2025: GDP growth projected at 3 percent
- 2026: GDP growth projected at 2.6 percent
- Medium-term projection:
- Growth projected to moderate gradually to below 2 percent
- Drivers of moderation: sluggish productivity growth, increasing emigration, and vulnerability to climate events
- Support for near-term growth: externally-financed infrastructure projects including the new phase of Tuvalu Coastal Adaptation Project and an increase in public investment
- Downside risks: heightened global uncertainty and increased downside risks despite limited direct impact of recent trade tensions
Fiscal and external balances
- Volatility persists in fiscal and external balances due to heavy reliance on fishing license fees and grants
- Table highlights (percent of GDP unless noted):
- Revenue:
- 2022: 100.7
- 2023: 154.1
- 2024: 110.2
- 2025: 122.9
- 2026: 118.3
- Non-grants revenue:
- 2022: 82.0
- 2023: 82.3
- 2024: 79.0
- 2025: 80.6
- of which fishing license fees:
- 2022: 48.4
- 2023: 57.6
- 2024: 44.6
- 2025: 41.6
- Grants:
- 2022: 18.7
- 2023: 53.4
- 2024: 27.8
- 2025: 43.9
- Expenditure:
- 2022: 115.3
- 2023: 138.8
- 2024: 118.4
- 2025: 122.3
- Net lending/borrowing:
- 2022: -14.6
- 2023: 15.3
- 2024: -8.2
- 2025: 0.6
- 2026: -3.0
- Net lending/borrowing excl. grants:
- 2022: -33.3
- 2023: -38.1
- 2024: -36.1
- 2025: -43.3
- Domestic current balance 1/:
- 2022: -71.3
- 2023: -84.6
- 2024: -73.6
- 2025: -74.2
- Tuvalu Trust Fund (in percent of GDP):
- 2022: 234.6
- 2023: 266.5
- 2024: 297.7
- 2025: 288.6
- Gross public debt:
- 2022: 11.0
- 2023: 7.7
- 2024: 7.5
- 2025: 7.4
- Nominal GDP (In AU$ million):
- 2022: 78.1
- 2023: 76.1
- 2024: 85.5
- 2025: 90.0
- 2026: 94.6
- Balance of payments highlights (in percent of GDP):
- Current account balance:
- 2022: -0.3
- 2023: 7.3
- 2024: 14.9
- 2025: 5.5
- 2026: -0.4
- Goods and services balance:
- 2022: -101.6
- 2023: -112.8
- 2024: -107.0
- 2025: -109.8
- Gross reserves (In AU$ million):
- 2022: 123.7
- 2023: 105.8
- 2024: 127.8
- 2025: 137.5
- Reserves in months of prospective imports:
- 2022: 13
- 2023: 14
- 2024: 11
- 2025: 12
Executive Board assessment and policy recommendations
- Directors welcomed the ongoing recovery but noted increased downside risks and significant structural challenges from remoteness, high dependence on external revenue and grants, rising emigration, and vulnerability to climate change.
- Fiscal strategy priorities:
- Enhance fiscal sustainability
- Reduce the deficit and ensure adequate buffers
- Mobilize revenues, rationalize expenditure, and reprioritize resources
- Improve public financial management to reduce volatility and fiscal risks
- Financial sector and inclusion:
- Establish an effective regulatory and supervisory framework
- Enhance financial inclusion
- Improve connectivity to the global payment system, including joining the Asia Pacific Group on Money Laundering and modernizing financial services
- Strengthen AML/CFT framework and safeguard correspondent banking relationships
- Enforce reporting requirements, consolidate prudential standards, and enhance risk monitoring
- Structural reforms to boost growth and resilience:
- Prioritize development of reclaimed land
- Enhance the efficiency of public services
- Strengthen state-owned enterprise governance and performance
- Improve infrastructure and explore economic diversification
- Enhance human capital and facilitate female labor force participation to mitigate emigration impacts
- Enhance resilience to climate change and strengthen disaster preparedness
- Capacity development and close engagement with the Fund and development partners remain essential
Key social and economic indicators (selected)
- Population (2024 est.): 9,853
- Poverty rate (2017): 26 percent
- Per capita GDP (2024 est.): AU$8,680
- Life expectancy (2023): 65 years
- Main export: Fish
- Primary school enrollment (2022, gross): 98 percent
- Secondary school enrollment (2022, gross): 91 percent
- Key export markets: Australia, Fiji, and New Zealand
Source: IMF Executive Board Concludes 2025 Article IV Consultation with Tuvalu (Press Release No. 25/293), September 12, 2025.