Economic Impact Assessment

Economy

Economic Impact Assessment of Covid-19, Yasur Ash-Fall & TC Harold

The Coronavirus of 2019 (COVID-19) pandemic which has been impacting the global economy, compounded with TC Harold which struck the country on the 11th of April 2020 have resulted in Gross Domestic Product (GDP) growth forecasts needing to be revised significantly downwards from 3.4 per cent projected in the third quarter of 2019 to only 0.6 per cent in the Macroeconomic Committee’s (MEC) second quarter meeting of 2020. Survey results conducted by the Department of Finance and Treasury in collaboration with the Reserve Bank of Vanuatu and the Vanuatu National Statistics Office show that both disasters have inflicted considerable damage on all sectors of the economy. In the absence of Government response to these disasters, it is estimated that the economy would decline by 1.4 per cent in total. Nevertheless, the Government has been proactive in its policy decisions in devising and implementing practical policy measures to contain the impact of COVID-19.

Such include the Employment Stabilisation Payment (ESP) and TC Harold relieve through cyclone emergency fund which in all total to VT 5 billion. The Agricultural Sector has been severely affected this year projected to contract by 12.8 per cent while the Services Sector is projected to decline by just 0.3 per cent. The Industrial Sector is expected to offset the forecasted negative growth trends in the above-mentioned sectors. The encouraging 23.5 per cent forecasted for 2020 reflects the planned TC Harold reconstruction efforts as well as the implementation of ongoing infrastructural projects. A speedy recovery is nonetheless expected over the medium term driven by disaster recovery programs as well as government policy shifts towards a sustainable economic condition over the long run. One major caveat to the projections is that the COVID-19 pandemic timeframe is at present unknown, which brings about implicit risks in the Government’s response plans in terms of the availability of fiscal resources. It is crucial that response plans by the Government and its development partners be implemented on time and that resources allocated under the relevant policies are efficiently used to ensure the sustainability of the economy in these time of economic hardship.

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Pentecost Road - Melsisi to Pangi

Economy

Executive Summary

 Infrastructure development is the main source of linkage in trading and accessing potential market and sustaining production over the years. The scattered islands and remote villages with its relatively distributed population and rough road contributes to high cost of operation in terms of trading among agricultural commodities such as transport services and social economical services provided by the Government over the past 30 years.

The island of Pentecost has been known for the past years as the main supplier of kava to the main urban centers (Port Vila and Luganville) and will continue to provide and sustain income/employment for local farmers and urban retailors. The opening up of the kava trade recently in Europe (Germany) after the ban of importation for the past 10 years will contribute to the increasing demand externally for kava juice and powder. The current green kava price of VT 800 - VT1, 000 per kilo have push farmers to concentrate on kava planting and less forecast on other commodities production. For many locals the commodities nowadays label as the locals “Green Gold” have increase purchasing power within the domestic local economy.

The propose 28.8 kilometer tar seal road from Central Pentecost to South Pentecost will cost the Government through concessional loan agreement around VT 4.4 billion, However upon the cost benefit analysis under taken in assessing and evaluating the benefits and potential along the distance road the potential benefit within the medium and long term outweigh the cost. The result of the analysis undertakes indicates that there are substantial advantages in the construction of the new road upgrade projects and the performance of most of the partially indicators collected during the economic assessment feedback indicates great potential still not utilize on the propose route.

Traffic on the new road projects is much higher and as consequences both users and societies are better off, as total savings are higher and externalities lower than the user fee option. With the introduction of a user fee system, basically to generate revenues for financing the loan or maintenance purposes, the new project roads would remain under-utilized during the initial years.

Monthly Report

Trevor Mele Trief Economy

Monthly Report

This monthly report is produced by Treasury Divsion - Department of Finance and Treasury

Half Yearly Economic and Fiscal Report

Trevor Mele Trief Economy

Fiscal Strategy Reports

Knowledge Based
What is a Fiscal Report?
  • A fiscal report is also known as a financial report or an annual report. This type of report is written once per annum and it outlines all information and data related to the Government's financial status during the fiscal year in question. All other information falling outside the fiscal period is not included in the given report, as the data skews the information and provides inaccurate figures.
  • Purpose: A fiscal report is written to document the Government's honest financial status at any given time. There are two purposes of the report: one is to document the financial situation for the Government's internal planning, and the other purpose is to attract investors.
  • Content: There are two important sections that go into a fiscal report: one focuses on the operations and the other on the net worth of the Government. The operational section outlines all of the Government's budgets, including operational, production and master budgets. In addition, income statements are often included to document all incoming money to the Government revenue basket. The second section outlines the Government's net worth by outlining all liabilities and assets within the Government.

Half Year Reports

Economic Assesement

Trevor Mele Trief Economy
Economic Assessment Summary Reports

The Economic Section within the Department of Finance and Treasury (DoFT) conducts business assessments on major stakeholders across six provinces in Vanuatu. The purpose of this assessment is to produce Vanuatu’s economic outlook over the medium term (1-5 years) as mandated by the Public Finance and Economic Management (PFEM) Act.  

The economic assessments is conducted on quarterly basis in the provinces of Tafea, Shefa, Malampa, Penama, Sanma and Torba.  

It is vital that we collect from each entity information or data about the outturn of current year compared to the previous one, the opportunities and challenges faced along with plans anticipated for next year into the medium term. Information collected, treated with confidentiality, whereby only a summary report will be produced on an aggregate basis for respective sectors and the overall economy. Ultimately, the assessment results will enhance policies the Government designs toward sustainable and equitable growth (GDP) over the medium term.

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2024

Economic Assessment Report 2024

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