Palau Government Debt to GDP

Palau’s government debt-to-GDP ratio stood at 63.07 in 2025, ranking the country 67th globally according to IMF World Economic Outlook data, a figure closely aligned with peers such as Namibia at 63.57 and San Marino at 62.72. Over a 26-year span from 2000 to 2025, Palau's debt burden has fluctuated significantly, reaching an all-time high of 76.44 in 2023 amid heightened public spending, likely influenced by pandemic-related pressures and infrastructure investments, before moderating in the following years. The lowest point in this period was recorded in 2015, when debt fell to 21.69, reflecting a phase of fiscal consolidation and robust economic growth. The 2000 baseline stood at 37.11, indicating a long-term trend of increasing indebtedness punctuated by cyclical variations. While the recent decline from the 2023 peak suggests some fiscal restraint or improved revenue performance, the level remains elevated compared to historical norms. Sustained debt reduction will depend on stable economic growth, disciplined fiscal policy, and continued access to concessional financing, particularly given Palau’s vulnerability to external shocks and limited revenue base. Without structural reforms, the ratio may stabilize but is unlikely to fall sharply in the near term.