In the years after independence in 1968, Nauru possessed the highest GDP per capita in the world due to its rich phosphate deposits.

Economic uncertainty caused by financial mismanagement and corruption, combined with shortages of basic goods, resulted in domestic unrest.

[14] The nation's economy has grown significantly since 2012, with help from the reopening of the Nauru Regional Processing Centre, funded by Australia.

[13] Phosphate is Nauru's only export product, although the government also receives relatively significant foreign exchange income from licensing its rich skipjack tuna fishing grounds to foreign fishing vessels, which land an annual average of 50,000 tonnes of Nauru zone-caught tuna overseas.

[18][19] Effective from the end of April 2016, Westpac, one of Australia's largest banks, ceased to have any dealings with the Nauru government.

[22] On 24 January 2024, Nauru formally re-established diplomatic ties with the People's Republic of China after withdrawing recognition of Taiwan.

[26] Historically Nauru was regarded as a tax haven due to the operation of its international financial centre, which offered amongst other things offshore banking services.

[28] In July 2017 the Organisation for Economic Co-operation and Development (OECD) upgraded its rating of Nauru's standards of tax transparency.

Nauru had been listed alongside fourteen other countries that had failed to show that they could comply with international tax transparency standards and regulations.

In 2001 Nauru signed an agreement with Australia to accommodate asylum seekers (mostly from Iraq and Afghanistan) on the island, in return for millions of dollars in aid.

However, serious questions remain about the long-term viability of Nauru's economy, with uncertainties about the rehabilitation of mined land and the replacement of income from phosphates.

[31] The Nauru detention centre was established by the Australian government, with Nauruan agreement, in 2001 to cater for up to 800 refugees and asylum seekers under Australia's Pacific solution.