Budget 2019

Fiji Budget 2019: The Bainimarama Boom

Fiji is not immune to what happens globally. We rely heavily on Australian tourists and this reliance has also been highlighted by the International Monetary Fund.
30 May 2019 17:25
Fiji Budget 2019: The Bainimarama Boom
Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum addressing journalists at a workshop in Suva. Photo: Ronald Kumar

When the Attorney- General and Minister for Economy Aiyaz Sayed-Khaiyum addressed members of the major media organisations, he gave a few key insights into the process that his ministry undertakes when preparing and presenting the national budget.

One of the key things he pointed out was that:

  • Fiji has experienced strong and sustained growth for the last 9 consecutive years and on track for “a decade of positive economic growth – the Bainimarama Boom”.
  • On average, the economy has grown by 4.5 per cent since 2013 – this is much stronger than our historical averages (excluding 2.6 per cent growth for 2016, growth average is 4.9 per cent per year).
  • The economy is projected to grow by 2.7 per cent this year and around 3 per cent in the medium term.

Fiji is not immune to what happens globally. We rely heavily on Australian tourists and this reliance has also been highlighted by the International Monetary Fund.

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However, Fiji has fared well compared to other developing nations.

Why is debt to GDP ratio important and how are other countries doing?

Debt to GDP ratio basically means how much we borrow compared to what we earn. An example the Attorney-General has often given is a person earning $100 has a debt of $10 is not better off when compared to the $50 borrowed by a person earning $500.

Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum makes a point while addressing journalists at a workshop in Suva on May 28, 2019. Photo: Ronald Kumar

Attorney-General and Minister for Economy Aiyaz Sayed-Khaiyum makes a point while addressing journalists at a workshop
in Suva on May 28, 2019. Photo: Ronald Kumar

Same concept is applied to countries.

Additionally, slowdown in the global economy – US and China trade tensions, uncertainty on BREXIT, recent geopolitical developments, global commodity prices, developments in Fiji’s other major trading partners (Australia, NZ) are all factors which will affect Fiji.

Our post-Winston reconstruction works are coming to an end, global slowdown, and there’s a need to build fiscal buffers so Fiji can expect fiscal consolidation as Government has been saying, but Government will keep policies consistent but expenditure adjustments will be undertaken to build buffers.

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