Vanuatu is projecting real gross domestic product growth of 3.9% in 2026, rising to 4% annually from 2027 to 2030, as the government increases spending on infrastructure, education, health and agriculture under its 2026 national budget.
Deputy Prime Minister and Finance Minister Johnny Koanapo presented the budget statement on Nov. 6, outlining a spending plan of VT64.1 billion against estimated revenue of VT46.8 billion.
The budget is intended to support economic recovery, strengthen public services and improve living conditions across the country as Vanuatu prepares for its 50th independence anniversary in 2030.
Koanapo said the medium-term economic outlook remained positive despite continuing pressures on the global economy. The services sector is recovering, while the government has made progress in stabilising public finances.
The government plans to strengthen revenue collection and compliance while financing expenditure through a combination of domestic borrowing and support from development partners.
Infrastructure and public services
Infrastructure development is among the budget's priorities, with VT3.6 billion allocated for infrastructure projects.
The government plans to complete critical road packages and municipal works, advance the Efate Ring Road and Santo East Coast Road projects, and upgrade airports and ports.
Education receives VT1.2 billion for infrastructure and teachers' entitlements, while VT515.2 million is allocated for health infrastructure and services.
The education programme includes meeting teachers' entitlements, supporting the National University of Vanuatu and improving school facilities.
In the health sector, the government plans to upgrade facilities and equipment and recruit more doctors and medical specialists.
Agriculture is allocated VT200 million to support farmers, improve livestock production and animal health, and promote value-added products and exports.
Recovery and business support
The government is also continuing a stimulus programme intended to support economic recovery, employment and small businesses.
It allocated VT312 million for the demolition and reconstruction of damaged buildings, while VT187 million has been disbursed under a wage subsidy programme to support jobs and ease financial pressure on employers.
A further VT62 million has been paid in small-business grants to more than 300 vendors.
The measures are intended to help businesses and workers recover while strengthening the economy's capacity to withstand future disruptions.
Debt management and climate resilience
Vanuatu has launched its Fourth National Debt Management Strategy for 2025 to 2028, providing a framework for managing public debt and protecting financial stability.
The government said the strategy is intended to strengthen economic resilience and ensure debt remains sustainable.
Climate change and disaster preparedness are also priorities under the 2026 budget. The government plans to advance its National Adaptation Plan, implement the National Loss and Damage Policy and strengthen Vanuatu's position on climate issues.
The spending priorities reflect the country's exposure to climate-related disasters and the need to improve the resilience of infrastructure, communities and economic activities.
Koanapo said the budget was designed to lay the groundwork for a stronger and more inclusive economy, with investment in infrastructure and essential services intended to support development over the coming years.
The full 2026 budget statement is available online.
