Asia Regional Integration Center

Economic growth was unchanged at 2.8% in 2019. The decline in tourism growth, alongside slowed construction and a drop in imports was offset by a sharp rise in recurrent public expenditures from 3% in 2018 to 15% in 2019. The fiscal surplus, however, narrowed to 6.7% as expenditures outpaced revenues. Nonetheless, the honorary citizenship programs and value-added tax provided needed revenue in 2019. Travel restrictions and the global economic slowdown from the COVID-19 pandemic will derail tourism in 2020 and hamper construction on those infrastructure projects that rely on imports and foreign labor. The economy is forecast to contract 1% in 2020 before recovering to 2.5% growth in 2021.