As Vanuatu was recovering from the multiple natural disasters of 2023, the
voluntary liquidation of Air Vanuatu in May 2024 created a major shock with significant
effects on growth and business confidence. The negotiations about the future of the
airline, along with developments linked to the Economic Citizenship Program (ECP) will
have significant economic, social, fiscal, and financial integrity implications. Disruptions
to connectivity, tourism, and services will likely affect economic activity in 2024: real
GDP growth is expected to grow only by around 1 percent y/y, and the current account
deficit will likely widen around 7½ percent of GDP, although there is significant
uncertainty to forecasts. Ongoing vulnerabilities and exposure to other risks keep the
balance of risks to the downside. Structural vulnerabilities to governance, corruption,
and natural disasters remain.