Achieving fiscal sustainability despite dependence on volatile and uncertain revenue sources is a common challenge for Kiribati and the other small island economies in the Pacific. Record high fishing license revenues and investments from development partners have underpinned rising public expenditure and growth.
|Selected economic indicators (%) – Kiribati||2015||2016 Forecast||2017 Forecast|
|Current Account Balance (share of GDP)||25.0||15.0||-10.0|
Source: Asian Development Outlook 2016
Kiribati’s economy grew by 3.0% in 2015, driven by spending on infrastructure projects to upgrade a road and improve sanitation using development partner funds. Higher fishing license revenues that enabled increased government spending also contributed to growth.
The strongest El Niño in nearly 20 years has brought record tuna migrations to the region. As a signatory to the Nauru Agreement, Kiribati has benefited in recent years from higher licensing fees under the vessel day scheme. In 2015, fishing license revenues as a share of GDP were 99% for Kiribati.
The ongoing implementation of major projects, funded by development partners, in transport and in water supply and sanitation are expected to support growth at 1.8% in 2016, rising to 2.0% in 2017.
Read more from Asian Development Outlook 2016.