Basic macroeconomic indicators for the last 5 years (nominal GDP/cap., development of GDP volume, inflation rate, unemployment rate). Expected development in the territory with an emphasis on the economic sphere.
| GDP growth (in %) | |||||
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 p |
| 5.8 | 3.8 | 3.5 | 1.8 | 2.5 | 2.3 |
Source: Asian Development Bank
| Inflation (in %) | |||||
| 2013 | 2014 | 2015 | 2016 | 2017 | 2018 p |
| -1.5 | 2.1 | 0.6 | 0.7 | 2.2 | 2.5 |
Source: Asian Development Bank
Kiribati has enjoyed longer-term economic growth, averaging 3.2% between 2012 and 2016. After relatively low growth in 2016 (1.8%), growth accelerated to 2.5% in 2017, mainly thanks to income from fisheries, which increased by 2.6% compared to 2016. Higher incomes supported higher public spending, especially in the case of wages, which increased by 14.5% in 2017. In addition, growth continues to be driven by investments in infrastructure supported by development partners, which amount to 49.5% of GDP. GDP per capita, according to the ADB estimate, is $2,270. Check ebizdir for economical facts of Kiribati.
Public investments financed by development partners will be the reason for further economic growth in 2018 and 2019 as well, and according to ADB estimates, economic growth should reach 2.3% in 2018. In the following years, moderate growth (1.5%) is expected due to continued falling revenues from fishing licenses, which will also burden public spending and economic production. However, the government should be in a better position to withstand this decline in the coming years after much of the surplus from fisheries revenue has been used to replenish the fiscal reserve in the Revenue Equalization Reserve Fund (RERF).
Employment
According to the latest available data from 2016, the number of economically active persons was only 69,000. workers. However, a significant part of the economically active population is only partially employed (up to 70%) and with a low mandatory retirement age (50 years). According to the ADB statistical report from 2017, total unemployment is 30.6%. About 27% of the population is employed in agriculture, the rest in services and the industrial sector.
Public finances, state budget – income, expenditure, balance for the last 5 years
| State budget | |||||
| 2013 | 2014 | 2015 | 2016 | 2017 | |
| Revenues | 93.2 | 143.4 | 157.6 | 112.6 | 132.2 |
| Expenses | 83.8 | 118.8 | 114.6 | 108.6 | 141.1 |
| Balance | 9.4 | 24.6 | 43.1 | -4.0 | -8.9 |
Source: Asian Development Bank (% of GDP)
Budget 2018 was developed based on the goals of the Kiribati Vision 20 and the Kiribati Development Plan 2016-19 (KDP), which aims to increase economic growth and alleviate poverty, improve education and healthcare standards, mitigate the effects of global climate change and improve environment, enable greater transparency and accountability in governance and improve infrastructure for all Kiribati islands. Kiribati Vision 20 reinforces these goals, but with a particular focus on tourism and fisheries development.
The budget continues to count on the largest volume of funds for building infrastructure and the health and education sectors. A new and main item in the 2018 budget is also an increase in the salaries of civil servants effective from January 1, 2018. An important source of the state treasury is the RERF fund, which is used to compensate for temporary shortfalls in budget revenues. This fund has more than USD 500 million.
Foreign financial aid from the EU, Australia, New Zealand, Taiwan, UN agencies and, to a lesser extent, other states (USA, Canada, etc.) represents roughly 20-30% of GDP. Kiribati is ranked among the least developed countries (LDC – Least Developed Countries), however, for the third time in six years, Kiribati met the criteria for promotion to a higher category of developing countries. In its March 2015 review, the United Nations Development Policy Commission postponed the decision to change Kiribati’s status from least developed country until another review in 2018 due to the vulnerability of the economy and doubts about the sustainability of the current level of government revenue.
Balance of payments (current, capital, financial account), foreign exchange reserves (last 5 years), public debt to GDP, foreign debt, debt service
| Current account balance | ||||
| 2013 | 2014 | 2015 | 2016 | 2017 |
| 19.6 | 53.0 | 47.4 | 18.9 | 13.8 |
Source: ADB (% of GDP)
| Foreign debt | ||||
| 2013 | 2014 | 2015 | 2016 | 2017 |
| 14 | 14 | 36 | 45 | 52 |
Source: ADB (million USD)
Banking system (major banks and insurance companies)
Kiribati does not have a central bank, the currency used is the Australian dollar. The only commercial bank is Bank of Kiribati Limited (75% owned by Australia’s ANZ)
Tax system
| Personal income tax | |
| income | tax rate |
| 4,001-15,000 | 20% |
| 15,001-30,000 | 25% |
| over 30,000 | 30% |
(in AUD)
| Corporate income tax | |
| income | tax rate |
| 0 -25,000 | 20% |
| 25,001-50,000 | 30% |
| over 50,000 | 35% |
(in AUD)
Non-resident legal entities are burdened with a single income tax of 30%. Since 2014, a value added tax of 12.5% has been introduced. The tax schedule is available here.
