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Sectoral Outcomes Improve After Disaster Impact

  The Reserve Bank of Fiji has confirmed our sectoral outcomes have generally improved following the natural disasters early this year. RBF Governor, Barry Whiteside, said consumption and investment activities
02 Jul 2016 08:15
Sectoral Outcomes Improve After Disaster Impact

 

The Reserve Bank of Fiji has confirmed our sectoral outcomes have generally improved following the natural disasters early this year.

RBF Governor, Barry Whiteside, said consumption and investment activities have picked up.

He said these are supported by accommodative monetary condition, higher inward remittances and tourism receipts and favourable labour market conditions.

This is in addition to targeted measures by the Government to assist in economic recovery.

This positive outcome also reflected improved performances in Fiji’s trading partner economies over the first quarter of this year.

Therefore, based on these factors, the RBF has agreed to maintain the Overnight Policy Rate at 0.5 per cent.

Nevertheless, downside risks remain particularly to the global growth outlook, as concerns have emerged on the effects of Britain’s exit from the European Union.

 

Budget 2016-2017

Mr Whiteside also welcomed the policies announced in the 2016-2017 Budget which he feels should further boost confidence and support growth in the economy while maintaining macroeconomic stability.

On the dual mandates of the Bank, he stated inflation rose to 5.2 per cent in May, largely reflecting domestic supply shortages and temporary price hikes in agricultural market products caused by the recent natural disasters.

Notwithstanding any further shocks, inflation is expected to ease over the coming months.

Foreign reserve levels remain comfortable at $1,979 million for June 30, equivalent to 5.5 months of retained imports of goods and non-factor services.

Mr Whiteside highlighted despite the recent uptick in some world commodity prices particularly crude oil and food prices, price levels are expected to remain below last years’ levels.

Hence, he said, these do not pose any immediate threat to domestic inflation and external stability at this stage.

“Against the comfortable outlook for inflation and foreign reserves, the Bank will continue to monitor the latest global and domestic developments and align monetary policy accordingly,” he said.

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