1 / 34

Palau Economic Review

Graduate School USA, Pacific & Virgin Islands Training Initiatives. Palau Economic Review. Republic of Palau, June , 2013. 1. Palau Economic Presentation. EconMAP Purpose and Status Economic Update Fiscal & Economic Policy Issues Fiscal and Financial Management Tax Policy

katen
Download Presentation

Palau Economic Review

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Graduate School USA, Pacific & Virgin Islands Training Initiatives Palau Economic Review Republic of Palau, June, 2013 1

  2. Palau Economic Presentation EconMAPPurpose and Status Economic Update Fiscal & Economic Policy Issues • Fiscal and Financial Management • Tax Policy • Constraints to Sustainable Growth • Compact Administration Going Forward 2

  3. EconMAP Purpose & Status Background & Program Economic Reviews since FY05 (2006) in FSM & RMI Augmentation of in-house statistics offices Inclusion of Palau since January 2012, now rolling out statistical bulletin; Economic Review to follow Funding source through DOI/OIA (January 2015) Addition of Palau was justified by anticipated needs under post-Compact Review arrangements. Staffing includes Mark, Kevin & Glenn 3

  4. Population 4

  5. Real GDP Growth 5

  6. REAL GDP, FY2005 Prices 6

  7. GDP: Private Sector & Goverment 7

  8. GDP Per Capita 8

  9. Consumer Price Index 9

  10. Consumer Price Index (Quarterly) 10

  11. Employment 11

  12. Employment SOEs + Agencies + State Governments Total National Government Employees 12

  13. Employment 13

  14. Wage Bill 14

  15. Nominal Wage Rates 15

  16. Employment by Citizenship 16

  17. Wages by Citizenship 17

  18. Real Wage Rates 18

  19. Real Wage Rates by Citizenship 19

  20. Banking 20

  21. Banking: Consumer vs. Commercial 21

  22. Revenues vs. Expenditures 22

  23. Unreserved Fund Balances 23

  24. External Debt 24

  25. External Debt RMI: 60% of GDP FSM: 28% of GDP 25

  26. A Measure of Fiscal Self-Reliance -16.6% -16.9% Other Domestic Revenues Taxes 26

  27. Policy Discussion Fiscal & Economic Policy Issues • Fiscal Policy and Public Financial Management • Tax Policy • Constraints to Sustainable Growth • Compact Administration Going Forward 27

  28. Fiscal & Economic Policy Fiscal Policy and Public Financial Management Uncertainty and lack of clarity on financial outturn constrains sound decision-making Clear need to modernize and strengthen public financial management system Restore Palau’s capacity to produce timely and reliable financial audits, as a necessary input to… 26

  29. Fiscal & Economic Policy Fiscal and Financial Management Achieve first-rate fiscal and budgetary management, perhaps through a Fiscal Responsibility Act, and by: • Repairing the balance sheet (short-term debt retirement) • Adjusting to renewed Compact terms • Building reserves for near-term fiscal resilience (Palau Budget Reserve Fund) • Adopting a sensible long-term strategy for fiscal self-reliance (augmenting Trust Fund) 27

  30. Fiscal & Economic Policy Tax Policy Achieved substantial increase in tax revenues as a share of GDP recently However, gains derived from outdated/inefficient tax policy regime (TT-inherited) Implementation of a well-formulated, modern and efficient tax regime advisable… 28

  31. Fiscal & Economic Policy Tax Policy Implementation of a well-formulated, modern and efficient tax regime advisable: Broad-based consumption tax (VAT) and targeted excise taxes Abolish BGRT, uniform import tax as first-stage VAT Net profits tax Substantial investment in tax administration modernization and reform Quality of implementation more important than pace 29

  32. Fiscal & Economic Policy Constraints to Sustainable Growth Limited Capital Stock to Support Sustained Growth (esp. Tourism Plant) Infrastructure (Power, Water, Sewer) Connectivity/Information Communication Technology (ICT) Labor Force Development and Expansion Efficiency and Effectiveness of Financial Sector Environment 30

  33. Fiscal & Economic Policy Compact Administration Going Forward New arrangements (when in place) create new demands Advisory Group composition and role EconMAPby design is responsive to a portion of the anticipated needs 31

  34. Graduate School USA, Pacific & Virgin Islands Training Initiatives Questions or Comments? 32

More Related