Tuvalu: 2025 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Tuvalu

The 2025 Article IV Consultation highlights that Tuvalu’s economic recovery is expected to continue, with gross domestic product growth projected at 3 percent in 2025 and 2.6 percent in 2026, supported by externally-financed infrastructure projects and public spending. The report recommends implementing a multi-pronged fiscal strategy to maintain fiscal sustainability while supporting Tuvalu’s development priorities and addressing long-term challenges, particularly from climate change. Establish effective financial sector supervision by enforcing regular regulatory reporting of financial institutions, implementing consolidated prudential standards, and strengthening the supervisory authority. The economy continues to face significant structural challenges and downside risks, reflecting its economic and environmental fragility and heightened global uncertainty. It is important to implement prioritized and realistic structural reforms to enhance growth potential, including infrastructure, state-owned enterprises reforms, and economic diversification in potential sectors. Policies should focus on maintaining economic and financial stability, building resilience against shocks, and addressing structural challenges for sustainable growth.