The Republic of Kiribati's per capita Gross National Product of US$1,420 (2010)[5] makes it the poorest country in Oceania.

The economy now depends on foreign assistance and revenue from fishing licenses to finance its imports and development budget.

The Asian Development Bank’s assessment of Kiribati’s growth potential point identifies constraints imposed by “(i) land area, (ii) geographic dispersion across 5,000 km of ocean, (ii) remoteness from major markets with associated high external transport costs, (iii) high vulnerability to natural forces including climate change and sea level rise, and (iv) scarce natural resources.”[6] The expiration of phosphate deposits in 1979 had a devastating impact on the economy.

As the result of the Global Financial Crisis (GFC) the RERF was reduced due to failed Icelandic banks, as well as withdrawals made by the government of Kiribati to finance budgetary shortfalls.

Vulnerabilities to climate change, including coastline erosion, have also worsened.”[5] In one form or another, Kiribati gets a large portion of its income from abroad.

Given Kiribati's limited domestic production ability, it must import nearly all of its essential foodstuffs and manufactured items; it depends on these external sources of income for financing .

[citation needed] Fishing fleets from South Korea, Japan, People's Republic of China, Taiwan, and the United States pay a licensing fee in order to operate in Kiribati's territorial waters.

Due to its small size and spread-out nature, however, Kiribati also loses untold millions of income per year from illegal, unlicensed fishing in its exclusive economic zone.

Tourism attractions include World War II battle sites, game fishing, ecotourism, and Caroline Island, situated just inside the International Date Line and the first place on earth to celebrate every New Year.

Most islanders engage in subsistence activities ranging from fishing to the growing of food crops like bananas, breadfruit, and papaya.

Despite a weather-related drop in copra production, private sector activity appears to have picked up, especially in retail.

The Kiribati Provident Fund (KPF), also government-owned, manages the assets of the pension system, about 60 percent of GDP in 2010.

The AsDB has provided US$27.14 million over seven project loans to Kiribati from Asian Development Fund (ADF).

[5][10] Australia continues as the largest donor to Kiribati and has committed to provide A$28.2 million in development assistance in 2011-12.

On 1 March 2011, the World Bank announced a Country Assistance Strategy (CAS) for Kiribati, which is structured around the themes of: (i) addressing the existential threat posed by climate change; and, (ii) mitigating the effects of geographic isolation.