IMF review's Palau's economy;
Directors supported the continued use of the U.S. dollar as legal tender, given Palau’s small size and administrative capacity. They observed that Palau has maintained its external competitiveness, but remains vulnerable to terms of trade shocks. Greater pass-through of global oil prices to contain debt accumulation in public utilities would therefore be desirable. Directors welcomed continued improvements in financial sector oversight, but urged caution in proceeding with the plans to launch a corporate and ship registry, which could pose new challenges in fighting money laundering given Palau’s current oversight capacity.
Directors noted that high-quality data are essential for policy formulation and surveillance. They looked forward to the adoption of the GDP numbers compiled with the help of the Pacific Financial Technical Assistance Center and to the increase in staffing levels at the Bureau of Budget and Planning.
Palau- data from WDI