Double Digit Economic Growth Achievable: Ali

Fiji is set to record a double-digit growth in economy, the Central bank has said.

Reserve Bank of Fiji Governor, Ar­iff Ali said a recent RBF businesses survey showed marked improvement in sentiments for the next six and 12 months.

“These sentiments are also aligned to RBF’s retails sales survey which shows that sales are projected to grow by around 18 per cent,” he said.

Mr Ali’s remarks were made during the Fiji Institute of Accountants technical workshop at Warwick Fiji in Korolevu, Nadroga.

In his address to 400-plus accountants, he said the Fijian economy was set to record around 11.2 per cent economic growth in 2022.

This, he said, was supported positive business sentiments arising from the reopening of the international borders.

Promising

Mr Ali said the 2022 Gross Domestic Product growth projections were around 450,000, or 50 per cent of the 2019 arrivals.

“While arrivals for the first two months have been well above last year’s arrival, forward air­line bookings registered by Fiji Airways and hotel bookings look very promising from April to the end of the year,” he said.

“The three key sources of tourism for Fiji, which accounts for around three quarters of the total visitors, come from Australia, New Zealand and the United States of America.

“Bookings from these destinations are look­ing promising.”

The participants were informed that Govern­ment expenditure was a significant contribu­tor to Fiji’s GDP.

“If there was a significant reduction in Gov­ernment expenditure, this would have resulted in a more severe contraction of the economy, posing huge challenges to any short-term re­covery,” Mr Ali said.

A reduction in expenditure would not have reduced debt or deficit by the same amount, as both direct and indirect taxes would have fallen, he said.

COVID-19 protocols

The Government has periodically relaxed COVID-19 protocols, Mr Ali said.

“It is likely that the three-day quarantine re­quirement will also be reviewed, because it has a direct impact on Fiji, as a tourist destination, in light of some of the recent announcements by Bali and Thailand,” he said.

On inflation, he told the delegates that weak global economic growth was usually associ­ated with low or depressed prices.

“However, the high prices of commodities are not driven by demand, but by supply side chal­lenges, which now has been compounded by the war in Ukraine,” Mr Ali said.

He thanked his team at RBF for thinking outside the box by implementing practical non-conventional central bank policies, which avoided a devaluation when Fiji’s main source of foreign earning, tourism, came to a stand­still.

Mr Ali said a devaluation on top of the cur­rent rising prices would have adversely affect­ed everyone and impacted confidence.

He said the non-traditional Central bank ini­tiatives resulted in an injection of liquidity of around $1.5 billion.

This was further supported by the bank’s objective to support economic recovery, through the maintenance of low interest rates, Mr Ali said.

He said the external and financial stability were intact and thus supporting economic recovery.

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