Tuvalu: Asian Development Bank Member Fact Sheet 2018

Abstract

The fragile Pacific microstate of Tuvalu is geographically isolated, vulnerable to climatic events, exposed to economic shocks, and lacking in many of the resources needed for sustainable growth and poverty reduction. With limited opportunities for private business, the country relies on its public sector as the main driver of growth. Tuvalu’s income derives largely from fishing license fees, trust fund investments, foreign aid, and remittances. Natural disasters such as cyclones, king tides, and droughts increase the volatility of revenue flows and can substantially alter fiscal outcomes. The use of the Australian dollar means the Government of Tuvalu is reliant on fiscal policy as the macroeconomic policy lever for economic growth.