SUNBIZ

Expect Economic Growth: Whiteside

The Fijian economy is expected to grow by 3.8 per cent this year, an upward revision from the October 2016 forecast of 3.6 per cent. This is after an estimated
21 May 2017 10:50
Expect Economic Growth: Whiteside
Reserve Bank of Fiji Governor Barry Whiteside with Prime Minister Voreqe Bainimarama last month during the launch of the new banknotes and coins. Photo: DEPTFO News

The Fijian economy is expected to grow by 3.8 per cent this year, an upward revision from the October 2016 forecast of 3.6 per cent.

This is after an estimated 2.0 per cent growth last year, a statement from the Reserve Bank of Fiji said.

Chairman of the Macroeconomic Committee and the Governor of the Reserve Bank of Fiji, Barry Whiteside said: “With the exception of fishing, forestry and mining, most sectors are expected to improve this year with the services sector envisaged to drive economic activity.”

Mr Whiteside noted that “overall, the sectors expected to lead the growth in 2017 include: manufacturing; financial and insurance activities; construction; wholesale and retail trade; and transport and storage”.

He said: “Improved growth in the manufacturing sector will be underpinned by an expected rebound in cane production which in turn will mean higher manufacture of sugar.

Added to this will be expected increases in the processing and preserving of poultry, dairy products, biscuits and mineral water production, he said.

“Greater activity within the financial sector coupled with the continuing accommodative monetary policy stance of the Reserve Bank, are expected to further contribute to growth,” Mr Whiteside said.

“The construction sector is anticipated to record a higher growth with major post TC Winston related reconstruction work spilling over from 2016 into 2017.

“Consequently, the wholesale and retail trade sector is also forecast to gain from increased sales of hardware and related building items.

“The transport and storage sector is expected to benefit from additional flights/routes by Fiji Airways into Adelaide and San Francisco and the establishment of code sharing arrangements on the Singapore and Hong Kong route with Jet Airways.”

Mr Whiteside added the growth forecast for 2018 remained unchanged at 3.0 per cent.

“All sectors are expected to register positive growth with major contributions emanating from the manufacturing, transport and storage and financial and insurance sectors. In 2019, the economy is envisaged to grow by 2.9 percent.”

On the external sector, he said: “Fiji’s trade deficit is expected to widen to 22.2 percent of GDP this year, and this will be largely offset by higher receipts from services (especially tourism) and remittances.

“The current account deficit (excluding aircraft) is now projected to be around 5.4 percent of GDP.”

Mr Whiteside said the “developments in the capital and financial account balance are envisaged to have a bigger surplus than previously forecast (7.0 per cent of GDP) on account of higher inflows through foreign direct investment and the disbursement of the US$50 million ($F104m) Asian Development Bank loan for TC Winston related recovery work”.

He added  “despite higher annual inflation in April (4.1 per cent) which was largely driven by supply shortages of agricultural produce and higher prices for yaqona after TC Winston, prices are expected to normalise towards the 3.0 percent forecast for the end of the year.

“Foreign reserves were around $2,242.2 million as at 19 May 2017, equivalent to 6 months of retained imports of goods and non-factor services and are expected to remain stable over the remainder of the year.”

 

Feedback:  ivamere.nataro@fijisun.com.fj

Fiji Sun Instagram
Fiji Plus
Subscribe-to-Newspaper