News 9 Nov 2017
Fiji’s economic growth projections have been revised, with the Fijian economy now forecast to expand by 4.2 percent in 2017 - an upward revision from the 3.8 percent growth projected in April.
The Macroeconomic Committee, which meets regularly to discuss economic projections and provide economic policy advice to Government, is made up of senior representatives from the Ministry of Economy; Fiji Bureau of Statistics; Ministry of Industry, Trade and Tourism; Office of the Prime Minister; Investment Fiji; Ministry of Infrastructure and Transport, Fiji Revenue and Customs Service and the Reserve Bank of Fiji).
Chairman of the Committee and Governor of the Reserve Bank of Fiji Ariff Ali (pictured) says the economy is expected to return to the pre-Tropical Cyclone (TC) Winston trend this year.
“However, the expansionary 2017-18 National Budget and associated policies that will boost disposable incomes and continued TC Winston related rehabilitation works are projected to provide additional impetus to economic activity,” he says.
As a result, growth will be driven largely by public administration and defence, manufacturing, construction, wholesale and retail trade and finance and insurance sectors, the Chairman adds.
Broad based growth is also forecast for the medium term.
“For 2018, growth outlook has been revised up to 3.6 percent, from the 3.0 percent envisaged earlier while the baseline forecast for 2019 and 2020 is 3.2 percent.”
On the external sector, the Chairman specifies that despite the expanding economy and trade deficit, the overall balance of payments is projected to remain comfortable due to adequate support from tourism earnings, remittances and foreign financing of private and public sector projects.
He says foreign reserves were around $2,409.7 million as at October 27 2017, sufficient to cover 6.0 months of retained imports of goods and non-factor services, compared to $1,921.2 million at the end of 2016.
“Given the spare capacity in the economy and subdued global food and commodity prices, inflationary pressures are expected to remain negligible for now.
“Inflation is forecast at 2.5 percent by end of 2017 and around the same levels at the end of 2018-20, barring any major supply side shocks,” the Chairman concludes.
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