As demand from its main tourist markets improves, Palau is expected to reach 3.8% in 2023 then accelerating to 6.5% in 2024, according to the latest Asian Development Bank Economic report.
The report says the anticipated renewal of compacts with the United States brightens economic and fiscal prospects but requires strengthened implementation capacity and public financial management.
Three years into the pandemic, ADB said , Palau like other North Pacific countries are on their way to recovery.
The report said Tourism accounts for about 40% of the Palau economy, and assistance under its Compact of Free Association with the United States (the Compact) will provide about $120 million in grants through 2024.
“The slowdown of tourist flows prior to the coronavirus disease (COVID-19) pandemic, and the subsequent shutdown of tourism during the height of COVID-19, emphasized the need for prudent financial management and revenue alternatives,“ it said.
ADB said it will continue to support Palau and that to date, ADB has committed 26 public sector loans, grants, and technical assistance totaling $202.5 million to Palau.
Cumulative loan and grant disbursements to Palau amount to $167.79 million.
ADB has provided $115 million in loans and nearly $4 million in grants and technical assistance to address challenges related to COVID-19, including a $770,000 grant that is currently supporting affected vulnerable groups.
To prepare for future shocks, Phase 3 of ADB’s Pacific Disaster Resilience Program will provide $20 million in disaster-contingent financing for recovery and reconstruction following future natural hazards or health emergencies.