Tuvalu

An economic recovery is underway, mainly driven by infrastructure projects financed by development partners. However, structural vulnerabilities remain a significant challenge to Tuvalu’s economic stability and growth prospects. In particular, its small size and remoteness imply a narrow domestic production base, heavy dependency on imports, and the dominance of the public sector. Both fiscal and external positions are significantly affected by volatile fishing license fees and grants. Tuvalu is also highly vulnerable to climate change and natural disasters. Rising migration poses additional challenges on Tuvalu’s small labor force and exacerbates labor shortages and capacity constraints.