Domestic inflation is expected to pick up to 4.8% in 2018, according to the new Asian Development Bank’s (ADB) report.
Inflation is fueled by the VAT increase and higher public service remuneration. In 2019, inflation is expected to ease to 2.5%. The current account deficit will likely narrow in 2018, due to higher earnings in tourism and agriculture. The deficit may increase in 2019 because higher commodity prices will drive imports higher.
ADB began working with the Government of Vanuatu in 1981. ADB has since approved 14 loans totaling US$89.36 million, 10 grants for US69.61 million, and 63 technical assistance projects worth US$22.9 million.