As a small, fragile, and remote island state, the Republic of the Marshall Islands faces several vulnerabilities and challenges, including high exposure to climate-related shocks and persistent labor emigration. Near-term growth is projected to accelerate amid expansionary fiscal policy. Growth is expected to moderate over the medium term, constrained by structural challenges and inflation to remain above its historical average. The government is pursuing an ambitious reform agenda. The recent renewal of the Compact of Free Association (Compact) with the United States offers a window of opportunity to enhance fiscal prudence and press ahead with such reforms.
International Monetary Fund. Asia and Pacific Dept (Mon,) studied this question.