A new forecast next week will show better numbers than the initial 11.3% of GDP. “I don’t think we’ll get a 23% growth rate; it may be slightly lower.” “The reason for the low forecast for some quarters for this year is that the forecast was made last year.”
Investment Fiji Chief Executive Officer, Kamal Chetty, Fiji Revenue and Customs Service Chief Executive Officer, and New Zealand Fiji Business Council, Shankar Sen, during the trade mission to Suva on June 20-22. Photo: Frederica Elbourne
Fiji is on track for a strong recovery, the Reserve Bank of Fiji said during a trade mission for the New Zealand Fiji Business Council to Suva yesterday.
“The COVID-19 pandemic was one of those crises that Fiji overcame without devaluation,” Governor Ariff Ali said.
Economic sentiments have improved dramatically, with Fiji recording its fastest growth rate for three consecutive years since independence, he said.
“The fact that people can now move freely is because of the support from New Zealand and Australia in providing vaccines,” he said.
“If they hadn’t provided the vaccines on time, I don’t think we would be open.”
Fiji is currently rolling out its second COVID-19 booster shot; its inhabitants move freely.
“This is the only crisis in the last 40 or so years where our interest rates have fallen,” Ali said.
Gross domestic product
Mr Ali said part of the strong economic growth was due to the base contracted over the past two years.
A new forecast next week will reveal better than initial figures 11.3% of GDP.
“I don’t think we’ll get a 23% Rate of growth; it may be a little less.
“The reason for the low forecast in some quarters for this year is that the forecast was made last year.”
Fiji has adopted fiscal policies similar to those of New Zealand and Australia.
Mr Ali said Fiji’s deficit level for the first nine months was 9% and was expected to be lower than the initial level. 14% provide.
“It would be around 11% at 12%,” he said.
Due to significant government spending over the past two years, the public debt has increased significantly to reach $8.6 billion.
“At one point, it was almost 85% of GDP“said Mr Ali.
“That has now dropped to about 79%given that the economy is expected to grow very strongly this year.
“Our debt-to-GDP ratio was around 50%amounts to 86% at the end of last year, and now it’s on a downward trajectory.
“It will be in the lower 70s next year.”
Spot rates were placed near zero, as a $1.6 billion injection for quantitative easing.
“In a crisis, we lose our reserves, liquidity plummets and interest rates soar.”
New loans in the first quarter of 2022 slightly exceeded $1 billionhigher than what was envisaged in 2017-2019 when the economy was strong.
“Part of the growth rate was due to pent-up demand over the past couple of years when there wasn’t a lot of borrowing,” Ali said.
“It’s been two years of contracted trade credit.”
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