Government of the Federated States of Micronesia

International Monetary Fund provides an Economic Assessment during November 4-9, 2009

Palikir, Pohnpei (FSM Information Services): December 8, 2009 – International Monetary Fund (IMF) staff visited FSM and concluded their assessment on the economic impact and outlook on the FSM in November 6, 2009. The IMF mission was also accompanied by staff from the World Bank and Asian Development Bank. The mission submitted their concluding statements which include the following economic highlights:

  • FSM economy grew by 1.5% in 2009 as compared to 2.9 percent decline in 2008

  • The Mission concludes that the economy will emerge from recession and grow by 5 percent

  • Inflation is estimated at 8 percent for 2009.

  • Over the medium term, economic growth will fall back at .5 percent

  • Improvement of the fiscal balance is highlighted as an important first achievement as well as Government’s commitment to revenue reform. Their assessments estimated that consolidated Government deficit decreased to -1.0 percent of the GDP in 2009.

  • Achieving fiscal sustainability requires a significantly large structural adjustment effort. The mission’s updated reform scenario requires increased use of Compact grants, streamlined public sector, tax reform, and structural reform to boost growth to 2 ¾ percent by 2015. This scenario shows that our economy will achieve fiscal surplus around 5 ½ percent of the GDP in FY 2014.

All inquiries may be directed to Ms. Rose Nakanaga, Assistant Secretary for Investment and International Finance, at Telephone 320-2639 or email address FSMInvestment@mail.fm.