Asia Regional Integration Center

The tourism-driven economy further contracted by 17.1% in fiscal year 2021 (FY2021, ended 30 September), following a 9.7% decline in FY2020. In the first half of FY2021, annual tourist arrivals reached about 3,400, a 91.8% drop from its pre-pandemic total of 90,000. Tourist arrivals slowly increased during the second half, with the resumption of a travel bubble with Taipei,China, and the opening of its borders to fully vaccinated tourists from the United States arriving via Guam. The economy is expected to grow by 9.4% in FY2022, with tourist arrivals projected to rise to 25,000. The risk remains that reopening measures may stall due to global uncertainties. The economy is expected to grow further by 18.3% in FY2023 if tourist arrivals return to pre-pandemic levels. Inflation, however, is also expected to rise to 4.3% in FY2022 and remain relatively steady at 4.2% in FY2023 due to projected trends in international commodity prices.