IMF Staff Country Reports

Constrained by structural challenges stemming from its remote location and
small landmass, Nauru's economy has registered low and volatile growth and is heavily
reliant on imports and foreign support, making it susceptible to external shocks,
particularly in a global environment with heightened trade policy uncertainty. The
growth outlook has improved, supported by the anticipated pickup of regional
processing center (RPC) operations and sustained donor support. Risks to the growth
outlook are tilted to the downside, driven by a global slowdown and potential decline
in donor support induced by deepening geoeconomic fragmentation and policy
uncertainty. Inflation is expected to moderate, though it could stay protractedly high
owing to rising wage growth in the public sector.