Vanuatu: 2025 Article IV Consultation-Press Release; and Staff Report

Summary

Vanuatu has faced a perfect storm of shocks. The national carrier, Air Vanuatu, went into liquidation in May 2024, the capital city experienced a major earthquake in December 2024, Economic Citizenship Program revenues remain at risk, and the export sector is grappling with an uncertain global environment. Following Parliament dissolution in November 2024, the government elected in January 2025 committed to strengthening political stability, rebuilding critical infrastructure, enhancing revenue collection, and improving public sector efficiency. Near-term challenges are paramount, as is setting the country on a path of sustainable and resilient policies over the medium-term. Modest growth is expected in 2025 while post-earthquake reconstruction may foster an improved outlook for 2026; risks are skewed downward. Structural vulnerabilities related to governance, corruption, and natural disasters persist.

Subject: Anti-money laundering and combating the financing of terrorism (AML/CFT), Crime, Debt sustainability, Debt sustainability analysis, Domestic debt, Environment, Expenditure, External debt, Government debt management, Natural disasters, Public debt, Public financial management (PFM)

Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), Debt sustainability, Debt sustainability analysis, Domestic debt, Government debt management, Natural disasters