Asia Regional Integration Center

The economy recovered slightly, growing by 1.5% in fiscal year 2021 (FY2021, ended 30 June), higher than its 0.8% growth in FY 2020. Pandemic-related restrictions continued to dampen economic growth, even as the economy was supported by COVID-19 response measures. Government expenditures rose by 22.3%, with funds allotted to health facilities and state-owned enterprises providing vital public services. The current account surplus fell to 4.6% of GDP (from 10.4%) as services exports suffered from the reduced operations of Nauru Airlines. GDP growth is expected to decelerate to 1.0% in FY2022 as activities related to the Australia-financed Regional Processing Centre wind down. Growth should bounce back to 2.4% in 2023 due to infrastructure projects and related activities.