The Asian Development Bank has forecasted Fiji’s growth at 7.1 % compared to a negative 4.1 % contraction in 2022.

This was highlighted in the ADB’s Asian Development Outlook 2022 released yesterday.

For 2023, it forecasts Fiji’s growth at 8.5 %.

Its forecast come against the heightened uncertainty and unsettled commodity markets following from the Russian invasion of Ukraine, the presentation highlights.

“The pandemic persists, fueled by the Omicron variant.”

“Milder health impacts and vaccination progress have allowed economies to remain more open than in previous waves,” the ADB presentation said.

Developing Asia rebounded by 6.9 % in 2021, buoyed by strong export growth.

But the pace of recovery remained uneven across economies.

GDP in the region will expand by 5.2 % in 2022 and 5.3 % in 2023, on continued recovery in domestic demand and solid exports.

Inflation will rise to 3.7 % in 2022 and 3.1 % in 2023.

The risks include escalation of Russia’s invasion of Ukraine, financial instability triggered by the Fed’s aggressive tightening, emergence of more lethal COVID-19 variants, and disruptions associated with the PRC’s current outbreaks.

The theme chapter shows how developing Asia must mobilize taxes for development, and provides policy solutions consistent with economy-specific circumstances and priorities.

The presentation added that monetary policy was supportive however the region was on the cusp of a tightening cycle.

Last month, the Reserve of Bank of Fiji kept the Overnight Policy Rate (OPR) unchanged at 0.25 %, maintaining an accommodative monetary policy stance.

Downside and Risks
The presentation noted that the escalating global geopolitical tensions arising from the Russian invasion of Ukraine could spill over to the region through sharper than- expected increases in energy and other commodity prices.

Aggressive tightening by the US Fed could trigger financial market volatility, capital outflows, and currency depreciations; raising financial stability risks in the region.

The emergence of more deadly COVID-19 variants and the PRC’s current Omicron outbreak could jeopardise regional growth and supply chains.

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