Economic Brief, Fsm Fy 2018
Economic Brief, Fsm Fy 2018 (PDF) (Report). Washington, DC: Pacific and Virgin Islands Training Initiatives (PITI-VITI). August 2019. p. 16.
- Has attachment: File:BBT6N753.pdf
Abstract: provides a detailed overview of the economic landscape of the Federated States of Micronesia (FSM) during the fiscal year 2018. It examines various facets of the economy, including its recent performance, fiscal policies, public financial management, and private sector development.
Recent Economic Performance (FY2018):The report highlights the volatility of economic growth during the amended Compact period, with initial weak performance followed by improvement due to strong demand for infrastructure. However, management issues and slow commencement of new projects posed challenges to sustaining growth.
The Financial Sector: The report discusses external debt, social security sustainability, and challenges arising from changes in Japanese corporate law, which impacts FSM's domicile for Japanese companies.
Fiscal Performance and Policy: Key topics include tax reform and long-term planning, specifically addressing post-2023 uncertainties and the need for a rational allocation of resources.
Public Financial Management: The FSM has maintained the state-owned enterprise sector without large subsidies, but profound restructuring is necessary due to fiscal uncertainties.
rivate Sector Development: The role of fisheries and other development initiatives, aided by reviews like those from the Graduate School USA, are crucial for the FSM's economic progress.
Compact Issues: The report highlights the need for clarity regarding U.S. funded programs and services post-2023 to ensure effective planning for the Compact Trust Fund distribution period.
Statistical and Other Issues: While statistical availability has improved, the IMF noted significant shortcomings in data provision, which affect economic surveillance.
Overall, the FSM has seen rising fiscal surpluses since FY13 due to increased fishing fees and corporate tax revenues, but challenges remain in social security sustainability and external debt management. The report calls for a strategic fiscal restructuring plan to address future economic needs amidst uncertainties beyond FY2023 .
