## Tuvalu: 2021 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Tuvalu

_IMF Staff Country Reports, August 4, 2021_

## Source details

**Canonical URL:** [Tuvalu: 2021 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Tuvalu](https://www.imf.org/en/publications/cr/issues/2021/08/04/tuvalu-2021-article-iv-consultation-press-release-staff-report-and-statement-by-the-463361)

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## Bibliographic details
- Published: August 4, 2021
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513591476.002

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### Economic impact of COVID-19 and near-term outlook
- Swift implementation of containment measures and limited spillovers from tourism allowed Tuvalu to avoid a recession in 2020.
- COVID-related fiscal spending was financed by buoyant fishing revenues and donor grants.
- The economy is expected to expand by 2.5 percent in 2021.
- The 2021 expansion is supported by fiscal expenditures and resumption of infrastructure projects.

### Fiscal situation and risks
- Fiscal support in 2020 was financed by:
  - Buoyant fishing revenues.
  - Donor grants.
- Uncertainty around donor commitments complicates fiscal planning.

### Structural vulnerabilities
- Tuvalu is characterized as a fragile Pacific micro-state.
- Key structural weaknesses:
  - Vulnerability to the effects of climate change.
  - An economy dominated by the public sector.
  - A narrow revenue base.

### Policy implications and priorities
- Maintain fiscal flexibility given uncertainty in donor funding.
- Prioritize resumption and efficient execution of infrastructure projects to support the recovery.
- Address long-term structural challenges including diversification of the revenue base and resilience to climate change.

*Tuvalu: 2021 Article IV Consultation—Press Release; Staff Report; and Statement by the Executive Director for Tuvalu*

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_Source: https://www.imf.org/en/publications/cr/issues/2021/08/04/tuvalu-2021-article-iv-consultation-press-release-staff-report-and-statement-by-the-463361_