Overall Economic Structure
Agriculture and associated exports, together with the tourism industry as well as the financial centre are the leading forces in the country's economy. The three major sectors of development are tourism, agriculture & fisheries. The tourism industry is growing very rapidly due the high number of tourists coming into the country via airlines and cruise ships.
New Foreign Direct Investments is beginning to have an observable impact on the economy. A more competitive market and higher foreign investment is expected to lift growth in later years. In toruism sector more accommodations are created to accommodate the fast increased number of tourist coming everyday by airlines. It is a positive sign of economic improvement in the country.
Gross Domestic Product
The Gross Domestic Product (GDP) was estimated in 1997 to be VT 15,223 million or VT
85,812 per capita, at constant (1997) market prices and at VT 29,175
million, at current market prices.
Growth averaged 3 percent annually in the decade following Independence
in 1980, with 6 percent in 1990 following a strong upturn in economic
activity and 3.8 percent in 1997.
Inflation & Prices
Average consumer prices over the four quarters of 1997 were 2.8% above those prevailing in 1996. The sharpest increases in prices were for "Clothing and Footwear" (6.7% above 1996 levels), "Rent, Water and Electricity" (5.8%) and "Transport and Communications" (5.4%). Food prices were only marginally above those in 1996.
Vanuatu's prices are largely determined by the price of imports. This means that the rate of inflation in Australia, where most imports are sourced, is a crucial influence on our inflation rate.
For the near to medium term inflation is based on the likely inflation rates of the major trading partners, particularly Australia, and some domestic inflationary pressure as the economy strengthens.
Currency
The local currency is known as Vatu. (VT).
The rate of exchange of Vatu, as at 9th September 2005, with respect to some important currencies were as follows:
Vatu 100 = 0.927 US Dollars
Vatu 100 = 0.504 Pound Sterling
Vatu 100 = 1.197 Australian Dollars
Vatu 100 = 0.747 European Euros
Vatu 100 = 1.309 New Zealand Dollars
Vatu 100 = 7.521 Chinese Yuan
Vatu 100 = 101.197 Japanese Yen
For the latest currency rates from ANZ please click here
The Vatu is the official currency although other currencies such as the US dollar and Australian dollar are accepted in some shops and restaurants
Savings and Investments
In the late 1980's the rate of domestic savings increased dramatically. From a level of 6% of Gross Domestic Product (GDP) in 1987 the level of savings increased annually to a peak of 24% in 1995. This is attributed to positive real rates of interest and savings, which were mobilised through the Vanuatu National Provident Fund (VNPF).