IMF Staff Country Reports

Federated States of Micronesia: 2023 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Federated States of Micronesia

Publication Date:

March 4, 2024

Electronic Access:

Free Download. Use the free Adobe Acrobat Reader to view this PDF file

Summary:

Economic growth has been volatile since the Covid-19 pandemic, and inflation reached decade-high levels mainly due to higher prices of imported food and energy. High vulnerability to climate change is also intensifying food security concerns. Despite the weak domestic economy, the fiscal and external current accounts posted large surpluses, partly thanks to foreign grants and taxes paid by foreign firms. The high uncertainty around medium-term external financing and economic prospects diminished significantly with the signing of a new Compact of Free Association (COFA) agreement between the FSM and the United States government, which includes larger grants for the next 20 years and will enable much needed public investment and reforms. However, the agreement still needs to be ratified by the US Congress.

Series:

Country Report No. 2024/066

Subject:

Climate change Debt sustainability analysis Environment Expenditure External debt International organization Monetary policy Public debt Public investment spending

Frequency:

regular