Palau still remains within the World Bank’s grouping of high-income economies, despite the gross national income declining in Fiscal Year 2022 due to the impacts of COVID-19.
According to the latest economic report of 2022 Graduate School USA, Palau’s Gross national income per capita attained a level of$15,799 in FY19, placing Palau in the World Bank’s high-income group by exceeding the $12,055 threshold.
In FY21 GNI per capita is projected to fall to $13,870 “reflecting the impact of the pandemic while still remaining above the World Bank threshold.
The report said the high-income economy classification “has important implications for the eligibility of Palau for assistance from both multilateral and bilateral donors.”
The report further said that Palau’s economy is estimated to have contracted by -8.9% in FY20 and a further-13.1% in FY21.
It also added that the construction industry is expected to contract further as projects are about to be completed with no new process to replace them.
GDP is now projected to fall -2.7% in FY22 and by -23% over the FY19-FY22 period
It also noted that the private sector was the most impacted by COVID -19.
“While the public sector is projected to remain unchanged—thanks to donor financing to maintain basic services—the brunt of the impact of the COVID-19 pandemic fell upon the private sector.
There report said that In FY20, a large reduction of -20.9% was experienced, reflecting
the collapse of the tourist economy after the end of March and indirect effects on secondary industries.
Further reductions are felt in In FY21, -22.7% occurred, reflecting the full-year impact
of the reduction in tourism with a further loss of -4.3% in FY22.
It said that overall, a massive loss in output of -41% hit the private sector during the