Economic Brief Palau Fy 2018

Economic Brief Palau Fy 2018 (PDF) (Report). Washington, DC: Pacific and Virgin Islands Training Initiatives (PITI-VITI). June 2019. p. 16.

• Has attachment: File:LB5IWSBZ.pdf

Abstract: In FY2014 and FY2015 the tourism economy boomed, and GDP recorded a growth of 4.4 and 10.1 percent, respectively. In FY2016 the economy continued to grow by 0.8 percent despite a large drop-off in tourism as the forward momentum in the economy supported for growth from strong household demand in an election year. In FY2017 the economy contracted by a large 3.5 percent reflecting a drop in visitors from 146,629 to 122,050, a 17 percent reduction. In FY2018 the economy grew by 1.7 percent despite the continuing fall in visitors to 115,964. The outlook for the current year, FY2019, looks set to be a further large contraction as visitor numbers decline to less than 90,000.

In the tourism boom years, when the economy was clearly on the upswing, tourism was clearly the main driver of growth; However, capital investment was also a positive force. On the downside, not only did tourism demand negatively impact GDP but capital investment also failed to support growth of the economy. In FY2016 both household and public expenditures were positive forces in an election year that turned around what otherwise would have been a negative result. In the last two years all elements of demand were negative except for public expenditures which supported the economy in FY2018...