IMF Staff Country Reports

Federated States of Micronesia: 2006 Article IV Consultation—Staff Report; and Public Information Notice on the Executive Board Discussion

Publication Date:

March 9, 2007

Electronic Access:

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Summary:

This 2006 Article IV Consultation highlights that real GDP in the Federated States of Micronesia grew by only 1½ percent in FY2005 and declined by nearly 1 percent in FY2006. The underlying fiscal situation has deteriorated, despite a decline in the overall deficit. Executive Directors have recommended that spending cuts and comprehensive tax reforms be phased in to secure fiscal sustainability. Priority should be given to reducing the public sector wage bill, which is large by regional standards, possibly in the context of a broad reform of the public sector.

Series:

Country Report No. 2007/106

Subject:

Commercial banks Extra-budgetary funds Financial institutions Fiscal policy Income Multilateral development institutions National accounts Public financial management (PFM) Revenue administration