Kiribati: 2017 Article IV Consultation-Press Release; and Staff Report

IMF Staff Country Reports, December 18, 2017

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Canonical URL: Kiribati: 2017 Article IV Consultation-Press Release; and Staff Report

Kiribati’s economic fundamentals have strengthened in recent years.
Strong fishing revenue improved the fiscal position, strengthened the current account, and boosted business confidence.
Real GDP growth:
- registered a double-digit rate in 2015,
- declined to 1.1 percent in 2016,
- projected to pick up to about 3 percent in 2017 driven by construction and wholesale and retail trade.
The authorities have made commendable progress in structural reforms, including important reforms to improve the governance and management of the Revenue Equalization Reserve Fund and replenishing the fund from the cash reserves.
Despite a favorable economic outlook, risks to near-term growth are substantial and skewed to the downside.

Key drivers of recent performance:
- Strong fishing revenue (explicitly cited as improving fiscal position and current account and boosting business confidence).
- Construction and wholesale and retail trade expected to drive growth recovery in 2017.
Growth trajectory:
- 2015: double-digit real GDP growth (exact double-digit figure not specified in source).
- 2016: real GDP growth of 1.1 percent.
- 2017: projected real GDP growth of about 3 percent.

Fiscal and reserve fund developments:
- Important reforms implemented to improve governance and management of the Revenue Equalization Reserve Fund.
- The Revenue Equalization Reserve Fund was replenished from the cash reserves.
Structural reform progress:
- Authorities have made commendable progress in structural reforms (no additional reform items detailed in the source excerpt).

Overall outlook described as favorable but with substantial near-term downside risks.
Risks are explicitly characterized as "substantial and skewed to the downside."