The Reserve Bank of Fiji Governor and Chair of the Macroeconomic Committee, Ariff Ali says a slower-than-anticipated travel appetite, the wait-and-see approach by investors in light of the upcoming 2022 General Elections, and the ongoing threats from natural disasters and climate change can easily stifle economic recovery going forward.
Ali says despite the growing optimism, there are downside risks to the economic outlook.
He says the vaccine inequity across the globe, with pockets of vaccine hesitancy, could lead to new variants that are more potent and highly transmissible, resulting in renewed lockdowns and other mobility restrictions globally, thereby dampening tourism demand.
Ali says on the upside, “lockdown fatigue” across the globe could flare up travel appetite, resulting in a stronger economic recovery.
The Governor says studies have highlighted that the COVID-19 virus will likely become endemic, with new variants such as Omicron emerging as we move forward.
He says it is paramount to adapt to the new normal by vaccinating the population, stringently following public health measures, including booster shots, and mobilising adequate resources in the health sector to ensure the continuation of economic activity with minimal disruptions.
Ali says the last two years have been extremely challenging for the Fijian economy.
He says while current labour market conditions and broader economic activity are still below pre-pandemic levels, recent indicators suggest that the COVID-19 induced economic recession has started to bottom out.
Ali says Fiji’s ability to rapidly fully vaccinate over 90 percent of its adult population has enabled the Government to gradually ease COVID-19 restrictions and ultimately reopen borders for international travel from 1st December, helping create a wave of optimism across the country.
He says the recent assessment by the Macroeconomic Committee is based on the latest available data and extensive consultation with line ministries, tourism stakeholders and the wider business community.
