International Monetary Fund (IMF) released (06-Nov-2018) its end of mission statement following a visit to Palau to assess the country’s economy. According to the statement:
- Economic growth in Palau declined by 3.7% in FY2017 because of a continuing downturn in tourism and subdued construction activities;
- Growth is projected to increase further to 2% in FY2019, owing to a gradual pick-up in tourism and an increase in capital investment funded by the US;
- Palau can strengthen growth potential by implementing a comprehensive tourism strategy on high value and environmentally sustainable tourism, while filling in infrastructure gaps. Palau’s economic growth rate has been volatile due to its strong reliance on tourism. There is room for greater geographical diversification of the source markets of tourists and the tourism locations and products within Palau, which would help reduce sectoral and macroeconomic volatility. The IMF supports efforts to adopt a broad strategy for sustainable tourism development, while protecting the environment and upgrading infrastructure to increase resilience to natural disasters and climate change.