Asia Regional Integration Center

The twin shocks of Tropical Cyclone Harold in April 2020 and the COVID-19 pandemic led the economy to contract by an estimated 0.8% in fiscal year 2020 (FY2020, ending 30 June). Construction and tourism declined most. A deeper 5.3% contraction is forecast for FY2021 with further declines in tourism and delays in construction projects. Growth is forecast to return to 1.8% in FY2022. Inflation slowed to 0.2% in FY2020 and is expected to stay at 0.8% in FY2021. The fiscal surplus was 5.3% of GDP in FY2020, but is expected to narrow to 0.8% in FY2021, reversing into a 5.9% deficit in FY2022 due to tax weakness and grant normalization. The current account deficit widened to 3.8% of GDP in FY2020 and is projected to widen to 11.5% in FY2021 before easing to 9.4% in FY2022 as tourism reopens .