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Table of Contents p. 47 of 68 BACK NEXT I. Developing Asia and the World II. Economic Trends and Prospects in Developing Asia ... II. Economic Trends and Prospects in Developing Asia Federated States of Micronesia The economy grew in FY2002, albeit more slowly than the past 2 years. Growth was supported by increased government spending using "bump-up" Compact funds. The consolidated fiscal position conceals the need for the national and all four state governments to make significant fiscal adjustments in view of lower Compact funding expected from FY2004. Growth is projected to pick up in FY2003. Macroeconomic Assessment GDP increased by 0.8% in FY2002 (year ended 30 September 2002), following growth of 1.1% in FY2001. With the exception of FY2000, growth has been very weak since the mid-1990s following reductions in Compact of Free Association funding. As the private sector and public enterprises did not expand in FY2002, yearly growth was driven by consolidated government expenditures, which increased by 2.3%. Based on employment data, the manufacturing, distribution, financial, and business services were the only sectors to expand. At the state level, GDP growth performance varied considerably. The respective growth rates were 6.8% for Kosrae and 3.0% for Pohnpei, and contractions of 1.8% for Chuuk and 2.3% for Yap. | |
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