## Federated States of Micronesia: Selected Issues

_IMF Staff Country Reports, March 4, 2024_

## Source details

**Canonical URL:** [Federated States of Micronesia: Selected Issues](https://www.imf.org/en/publications/cr/issues/2024/03/04/federated-states-of-micronesia-selected-issues-545541)

## Other formats

- [Markdown version](/en/publications/cr/issues/2024/03/04/federated-states-of-micronesia-selected-issues-545541/index.md)
- [Structured JSON version](/en/publications/cr/issues/2024/03/04/federated-states-of-micronesia-selected-issues-545541/index.json)
- [Bundle manifest](/en/publications/cr/issues/2024/03/04/federated-states-of-micronesia-selected-issues-545541/bundle-manifest.json)

## Bibliographic details
- Published: March 4, 2024
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400269103.002

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### Overview
- Focus: model based approach to study public investment, economic growth, and resilience in the Federated States of Micronesia (FSM).
- Central premise: Enhancing public investment management (selection, planning, and implementation) could significantly improve the efficiency of public investment and support economic growth.
- Context: FSM starts a new boost to public investment financed by foreign grants.

### Model, Scenarios, and Key Analytical Tools
- Methodology: Uses a dynamic Debt, Investment, Growth, and Natural Disasters model to illustrate effects of policy options.
- Scenario focus:
  - Higher and more resilient growth scenarios under different public investment management reforms.
  - Scenarios assessing private sector participation improvements.
  - Scenarios comparing impacts of different types of public investment on resilience to climate shocks.

### Major Findings
- Improving public investment management can significantly raise the efficiency of public investment and support economic growth.
- Reforms that improve public investment management can enhance private sector participation.
- The reforms can produce fiscal benefits through a higher growth dividend.
- Larger investment in climate-resilient infrastructure minimizes gross domestic product loss and allows the economy to bounce back faster after a large natural disaster.

### Policy Implications and Recommendations
- Strengthen public investment management across selection, planning, and implementation to:
  - Improve efficiency of public investment.
  - Support higher and more resilient economic growth.
  - Encourage greater private sector participation.
  - Realize fiscal benefits from higher growth dividends.
- Prioritize larger investment in climate-resilient infrastructure to:
  - Minimize GDP losses from climate shocks.
  - Accelerate post-disaster economic recovery.

### Subject Areas and Keywords
- Subject: Climate change, Environment, Expenditure, International organization, Monetary policy, National accounts, Natural disasters, Private investment, Public investment spending
- Keywords: B. climate change vulnerabilities in FSM, B. climate change vulnerability, Climate change, climate vulnerability, efficiency scenario, Global, infrastructure investment, Natural disasters, Pacific Islands, Private investment, Public investment spending

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## Content in this bundle

- **Federated States of Micronesia: Selected Issues; IMF Country Report No. 24/67; February 7, 2024**
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  - [Federated States of Micronesia: Selected Issues; IMF Country Report No. 24/67; February 7, 2024 (PDF)](/-/media/files/publications/cr/2024/english/1fsmea2024002.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/cr/issues/2024/03/04/federated-states-of-micronesia-selected-issues-545541_