Asia Regional Integration Center

The economy contracted by 5.5% in fiscal year 2020 (FY2020, ending 30 September) due to the impact of the COVID-19 pandemic. Travel bans, other mobility restrictions, and quarantines lowered fishing output and related manufacturing, stalled hospitality services, and limited local demand. This kept inflation low (0.3%) and helped temper the impact of higher prices due to supply bottlenecks. Lower imports narrowed the merchandise trade deficit, while increased grants from development partners increased the current account surplus to 13.8% of GDP from 9.4% in FY2019. Construction, trade, and transportation are expected to hurt the economy in FY2021, with a 1.4% contraction forecast. Growth is expected to return in FY2022, with GDP expanding by 2.5%.