2022 Economic Brief - Republic of the Marshall Islands

2022 Economic Brief - Republic of the Marshall Islands (PDF) (Report). Washington, DC: Pacific and Virgin Islands Training Initiatives (PITI-VITI). November 2022. p. 40.

• Has attachment: File:HLA4DMMG.pdf

Abstract: The Marshall Islands economy contracted by 1.6 percent during COVID less than originally had been feared. Following five years of pre-COVID economic growth, RMI real Gross Domestic Product (GDP) is projected to fall by 1.6 percent in FY2022 compared with FY2019 and employment to have contracted 1.4 percent. Reductions in the fisheries, retail and the small hotel sector represent most of the decline with public administration offsetting the reduction. The recent surge in inflation in other nations has yet to filter through to the Marshall Islands but is expected to rise rapidly in the coming months. The RMI benefitted from a $71-million donor response to COVID, primarily from the United States and the Asian Development Bank. The U.S. CARES Act unemployment benefits supported affected RMI workers. Household incomes in FY2021 are projected to be 8.7 percent higher than they would otherwise have been without the mitigation programs and unemployment benefits. However, the end of mitigation programs will lead to a projected 2.2 percent reduction of household incomes in FY2022. Fiscal policy in the RMI has been driven by available revenue, with expenditures adjusting automatically to rises in revenues. With the boom in revenues from fishing fees, the government has doubled its expenses on subsidies and transfers...