Republic of Palau: Selected Issues

May 6, 2014

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Format: Chicago

Republic of Palau: Selected Issues, (USA: International Monetary Fund, 2014) accessed December 22, 2024

Summary

This Selected Issues paper describes Palau’s fiscal challenges and policy options to achieve long-term fiscal sustainability. Palau relies heavily on compact grants, and without continued fiscal consolidation over the medium term, the fiscal position will become unsustainable after these grants expire in FY2024. The fiscal sustainability analysis uses an intertemporal budget constraint model to show that reducing the current deficit excluding grants by about 8 percentage points of GDP during FY2014–19 would ensure Palau’s long-term fiscal sustainability. The paper also discusses the role of tourism in Palau and identifies policy priorities to further promote this sector and sustain growth.

Subject: Economic sectors, Expenditure, Fiscal consolidation, Fiscal policy, Fiscal sustainability, Tourism

Keywords: CR, Fiscal consolidation, Fiscal sustainability, Global, Import tax exemption, Increase tourism revenue, ISCR, Pacific Islands, Palau, Palau's tourism infrastructure, Tax, Tourism, Tourism growth, Tourism industry, Tourism volatility

Publication Details

Pages:

27
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2014/111
Stock No:

1PLWEA2014002
ISBN:

9781484370964
ISSN:

1934-7685

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