Asia Regional Integration Center

The economy contracted 2.4% in FY2018 as the Regional Processing Centre (RPC), an Australian-funded facility for asylum seekers, scaled down operations. The facility has been the principal source of economic activity in recent years, providing revenue streams from visa fees, taxes paid by expatriate workers, demand for local services and infrastructure. Phosphate exports remained weak. The economy is forecast to decline by 1.0% in FY2019—less than the 2018 contraction—as the refurbishment of Nauru Port gears up. In FY2020, the economy is expected to grow 0.1% on the buildup of cash buffers and previous revenue from fishing licenses. However, revenue from the RPC remains uncertain and with fishing license fees projected to drop.