Browse

You are looking at 1 - 10 of 112 items for :

  • Micronesia, Federated States of x
Clear All
International Monetary Fund. Asia and Pacific Dept

FSM is highly vulnerable to climate change-induced natural disasters. While climate-related finance and investment in FSM have been growing in recent years, greater efforts are needed to build resilience against the impacts of climate change. Developing and implementing a comprehensive National Adaptation Plan, strengthening public financial management, improving coordination between agencies, and enhancing disaster risk reduction and preparedness will not only help cope with extreme climate-related events and natural disasters but also boost potential growth.

International Monetary Fund. Asia and Pacific Dept

1. The Federated States of Micronesia (FSM) experienced an economic rebound in FY2021, but growth has since stagnated due to additional shocks. Economic growth rose to 3 percent in FY20211, despite a border closure until August 2022, driven by a strong performance of the fisheries sector and government support to households in response to COVID. However, the rebound was short-lived, and the economy contracted by 0.9 percent in FY2022 driven mainly by the fisheries sector, which suffered from higher costs (including logistics and fuel) and volatile demand for tuna. In FY2023, growth is projected at 0.8 percent, reflecting a gradual pick up in construction, transport, and tourism, and an increase in national government wages. Inflationary pressures intensified, with inflation reaching a decade high 6.2 percent in FY2023 mainly due to higher import prices for food and fuel and supply side constraints (Annex III).

International Monetary Fund. Asia and Pacific Dept

Enhancing public investment management (selection, planning, and implementation) could significantly improve the efficiency of public investment and support economic growth. This is particularly important as FSM starts a new boost to public investment financed by foreign grants. Using a dynamic DIGNAD model, we illustrate the effects of various policy options on achieving higher and more resilient growth and improving private sector participation. The reforms can also have fiscal benefits through the higher growth dividend. Additionally, the impact of different types of public investment on building resilience to climate shocks emphasizes the benefits of larger investment in climate-resilient infrastructure to minimize GDP loss and allow the economy to bounce back faster after a large natural disaster.

International Monetary Fund. Asia and Pacific Dept

IMF Country Report No. 24/66