Press Release: IMF Staff Concludes 2016 Article IV Mission to Tuvalu
May 31, 2016
End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.
May 31, 2016
An International Monetary Fund (IMF) team led by Dan Nyberg visited Tuvalu during May 19–30 to hold discussions with the Tuvalu authorities and other stakeholders on the 2016 Article IV Consultation. At the conclusion of the discussions, Mr. Nyberg issued the following statement today in Funafuti:
“The macroeconomic outlook is stable. Real GDP growth in 2015 is estimated at 2.6 percent and is projected to rise to 4 percent in 2016 on account of several large infrastructure projects and recovery spending following Cyclone Pam. Inflation remained steady in 2015 at 3.2 percent and is expected to rise slightly in 2016 to 3.5 percent as economic activity picks up.
“The budget achieved a substantial surplus in 2015 for the fourth consecutive year, supported by strong fishing license fees, internet license fees related to the “.tv” domain, and development partner assistance. With four years of budget surpluses, fiscal buffers have been rebuilt and remain at a comfortable level. A moderate deficit is projected in 2016 as expenditures will remain elevated, partly owing to continued Cyclone Pam recovery spending.
“Risks to the outlook relate to the effects of climate change, volatility in fishing revenues, and a global financial downturn, which could affect distributions to the budget from the Tuvalu Trust Fund.
“Looking ahead, it will be important to preserve fiscal space to enable continued climate change mitigation investment and safeguarding sustainability. Continuing the recent performance will require recurrent expenditure restraint and effective public enterprise reform through enhanced governance and regulatory frameworks.
“During the visit, the team met with the Minister of Finance, Hon. Maatia Toafa, and other senior public officials, as well as representatives from the private sector, public enterprises, development partners, and civil society. Staff from the World Bank joined the mission. The team expresses its appreciation to the authorities and other stakeholders for the constructive discussions.”
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