IMF Staff Completes 2018 Article IV Visit to Fiji
It was a fruitful visit by the International Monetary Fund (IMF) team led by Pablo Lopez Murphy to conduct the discussions for the 2018 Article IV consultation.
The team have been here from December 3 till yesterday.
At the Article IV Press Conference yesterday at the Reserve Bank of Fiji, Mr Lopez Murphy said: “The economy is recovering well from several natural disasters and is expected to record its ninth consecutive year of expansion in 2018.
“The fiscal stance has eased substantially in fiscal year 2017/18 and external conditions are becoming less favorable due to lower sugar prices, higher oil prices, and slowing growth in main trading partners.
“Growth is expected to pick up to about 3.2 per cent in 2018, underpinned by consumption and public investment. The growth momentum is projected to continue in the coming years.
“Headline inflation increased to 5.2 per cent in November reflecting higher taxes on tobacco and alcohol as well as higher prices for yaqona caused by floods in April. Inflation is projected to decline to three per cent in 2019-20 as supply conditions normalise.
“Risks to the economic outlook are tilted to the downside.
“Downside risks stem from natural disasters; higher oil prices, slower growth in main trading partners, and delays in implementing structural reforms to mobilise private investment.
“On the upside, the new air routes and code share arrangements with Japan and United Kingdom may boost the tourism sector.
“Policies should aim to increase Fiji’s resilience to shocks and strengthen growth performance.
“Faster fiscal consolidation is needed to rebuild fiscal space and support external stability.
“Improving the business environment and governance will raise potential growth by mobilising private investment, enhancing productivity, and diversifying the economy.
“The team had fruitful discussions with the Attorney-General and Minister of Economy, the Governor of the Reserve Bank of Fiji (RBF), other senior public officials, several government agencies, development partners, and private sector representatives.
“Staff from the World Bank also joined some of the discussions. The team would like to thank the Fijian authorities for their hospitality and excellent co-operation.”
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