Growth forecasts for Tuvalu are unchanged from the Asian Development Outlook (ADO) 2014 projections in April. Growth is still seen to improve from the government’s revised estimate of 1.3% in 2013, stimulated by construction for the airport upgrade funded by development partners and by knock-on increases in retail sales.
|Selected Economic Indicators (%) - Tuvalu||2014||2015|
|ADO 2014||Update||ADO 2014||Update|
|Current Account Balance (share of GDP)||-9.6||27.3||-10.5||-37.4|
Source: ADB estimates.
Inflation forecasts remain unchanged despite a weakening Australian dollar (the official currency). Inflation is still expected to increase by half a percentage point in 2014 as economic activity strengthens, before returning to 2.0% in 2015 as international commodity prices fall.
High revenues from fishing license fees enabled Tuvalu to achieve budget surpluses equal to 26% of gross domestic product (GDP) in 2013. The current account is now expected to show a surplus equivalent to 27.3% of GDP in 2014 with revenues from fishing licenses and fish exports through joint ventures with Asian companies, but is still expected to cross into deficit in 2015 on higher imports for projects.
Source: ADB. 2014. Asian Development Outlook 2014 Update. Manila.