Managing Revenue Volatility in a Small Island Economy: The Case of Kiribati

Author/Editor:

Catriona Purfield

Publication Date:

August 1, 2005

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The formulation of fiscal policy in Kiribati faces unusual challenges. Kiribati's revenue base is among the most volatile in the world, and it possesses sizeable financial assets. Drawing on lessons from some other countries who experience high volatility in their revenues, this paper proposes a fiscal policy rule for Kiribati which is nested within a medium-term macroeconomic framework that aims to ensure the sustainable use of Kiribati's financial assets while managing the impact of extreme revenue volatility. It also discusses improvements in the institutional fiscal policy framework that could support such a framework.

Series:

Working Paper No. 2005/154

Subject:

Agroindustries Budget planning and preparation Expenditure Fiscal policy Oil

English

Publication Date:

August 1, 2005

ISBN/ISSN:

9781451861730/1018-5941

Stock No:

WPIEA2005154

Pages:

23

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