Palau

Palau is a small island developing state in free association with the United States, with an economy largely driven by high-value tourism and Compact assistance. The pandemic significantly affected public revenues, prompting fiscal reforms and renewed emphasis on economic resilience. Development priorities include marine conservation financing, renewable energy expansion, digital connectivity and sustainable tourism management. As a low-lying island state, Palau faces climate vulnerability, and strengthening public financial management and broadening the domestic private sector are central to sustaining long-term growth.