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‘On Track To A Fast Recovery’

A new forecast next week will reveal figures that were better than the initial 11.3% of GDP. “I don’t think we will get a 23% growth rate; it may be slightly less." “The reason for the low forecast from some quarters for this year is because the forecast was made last year."
21 Jun 2022 16:30
‘On Track To A Fast Recovery’
Investment Fiji Chief Executive Officer, Kamal Chetty, Fiji Revenue and Customs Service Chief Executive Officer, and New Zealand Fiji Business Council President, Chandra Sen, during the trade mission in Suva on June 20, 22. Photo: Frederica Elbourne

Fiji is on track to a strong recovery, the Reserve Bank of Fiji, said yesterday, at a trade mission for New Zealand Fiji Business Council, in Suva.

“The COVID-19 pandemic was one such crisis that Fiji weathered without devaluation,” Governor, Ariff Ali, said.

Economic sentiments have significantly improved, as Fiji recorded its fastest growth rate for three consecutive years, since independence, he said.

 

“The fact that people are able to move around freely now is owed to New Zealand and Australia’s support in supplying vaccines,” he said.

“Had they not provided the vaccines on time, I don’t think we would be open.”

Fiji is now rolling out its second COVID-19 booster shot; its people are moving around freely.

“This is the only crisis over the last 40 years or so, where our interest rates fell,” Mr Ali said.

 

 

Aerial shot of the Port of Suva. Photo: Leon Lord.

Aerial shot of the Port of Suva. Photo: Leon Lord.

Gross Domestic Product
Mr Ali said part of the strong economic growth was owed to the contracted base over the past two years.

A new forecast next week will reveal figures that were better than the initial 11.3% of GDP.

“I don’t think we will get a 23% growth rate; it may be slightly less.”

“The reason for the low forecast from some quarters for this year is because the forecast was made last year.”

 

 

Cargo ship Capitaine Tasman berth at Suva Harbour on September 29, 2020. File Photo: Ronald Kumar.

Cargo ship Capitaine Tasman enters Suva Harbour on September 29, 2020. File Photo: Ronald Kumar.

Fiscal Measures
Fiji adopted fiscal policies that were similar to that of New Zealand and Australia.

Mr Ali said Fiji’s deficit levels for the first nine months was nine per cent, and was projected to be less than the initial 14% forecast.

“It would be around 11% to 12%,” he said.

 

As a result of the Government’s large expenditure over the past two years, Government debt had increased significantly to $8.6 billion.

“At one stage, that was about 85% of GDP,” Mr Ali said.

“This has now fallen to about 79%, given that the economy is expected to grow very strongly this year.”

 

“Our debt to GDP ratio was somewhere around 50%, risen to 86% late last year, and now it’s on a downward trajectory.”

“It will be in the lower 70s next year.”

Cash rates were placed at close to zero, as an injection of $1.6 billion for quantitative easing.

 

“In a crisis, we lose our reserves, liquidity falls, and interest rates rise through the roof.”

New loans over the first quarter of 2022 was just over $1 billion, higher than what was envisioned in 2017-2019 when the economy was strong.

“Part of the growth rate was owed to pent up demand in the last two years, when there wasn’t much borrowing,” Mr Ali said.

“That’s two years contracted commercial credit.”

 

Feedback: frederica.elbourne@fijisun.com.fj



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