NEWS

Our Economy To Grow By 11.7% This Year And 8.5% in 2023

“This will play a vital role in supporting resilience, even as rising inflation is threatening recent economic gains.”
05 Aug 2022 16:57
Our Economy To Grow By 11.7% This Year And 8.5% in 2023

The Asian Development Bank (ADB) has revised its 2022 economic growth forecast for Fiji to 11.7 per cent. Earlier this year, the ADB had projected the country’s economy to grow by 7.8 per cent in 2022.

However, in its latest Pacific Economic Monitor report released yesterday, the ADB states that based on recent visitor arrivals and forward booking trends, the Fiji economy is now projected to grow by 11.7 per cent this year, 8.5 per cent in 2023, and 9.9 per cent in 2024.

The report stated that tourism-related sectors contribute 10.7 percentage points of the projected 2022 growth rate with spill overs to other sectors of the economy.

It added that Tax income, which represented 85 per cent of pre-pandemic government revenue, has also increased.

 

“Value-added tax collections (representing 25 per cent of pre-pandemic government revenue) increased by 48 per cent in FY2022, while employment income tax increased by 7 per cent as jobs are gradually being restored,” the report stated.

“The Government has committed to respond to the threats posed by climate change by investing in long-term strategies that will ensure the country’s resilience.”

“As the economy regains its footing and restarts its recovery from coronavirus disease (COVID-19) with the recent reopening of the tourism sector, rolling out Fiji’s climate adaptation plans can help sustain the recovery tempo.”

“This will play a vital role in supporting resilience, even as rising inflation is threatening recent economic gains.”

 

Recovery Amid Risks

The report stated that as recovery built momentum, the impact of the Russian invasion of Ukraine on commodity prices was projected to offset nominal gains in economic activity and revenue collections.

Since November 2021, overall consumer prices have increased by 5.7 per cent in a period of six months. This was the highest on record for the same period.

The price increases are dominated by food and fuel related categories.

“In the first quarter of 2022, the import values of fuel products increased annually by 72 per cent, vegetable products by 41 per cent, and prepared food by 41 per cent, underpinned by both high import prices and improvement in demand conditions,” the report said.

“The second-round effects of the increase in prices are also being transmitted downstream.”

“High fuel prices have led to increased bus fares, while higher inflation has necessitated increases in national minimum wages.”

 

Feedback: inoke.rabonu@fijisun.com.fj



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