Economic recovery is dependent on the successful containment of the COVID outbreak and the re-opening of borders for tourism – Ali
IMF facility will further boost our foreign reserves by around $265 million in the coming months

Economic recovery is dependent on the successful containment of the COVID outbreak and the re-opening of borders for tourism – Ali

IMF facility will further boost our foreign reserves by around $265 million in the coming months

By Vijay Narayan
Friday 02/07/2021

The Reserve Bank of Fiji Governor and Head of the Macroeconomic Committee, Ariff Ali says Fiji’s economic recovery is dependent on the successful containment of the COVID outbreak and the re-opening of borders for international tourism.

Ali says Fiji’s economic growth is expected to rebound to 6.2% in 2022 and accelerate to 8% in 2023

The RBF Governor says as tourism activity stalled from last year, the negative knock-on effects were felt on overall economic activity leading to the deterioration in employment as well as business and household incomes.

Ali says this broad-based contraction in demand and economic activity also translated into lower tax revenue for Government, which also contributed to the negative GDP outcome for 2020.

He also highlights the contraction in the Fijian economy is consistent with most emerging and developing economies, especially tourism-dependent countries, where economic activity contracted significantly and will take some time to return to pre-pandemic levels.

Ali says for 2021, with no community transmission for almost a year, there were strong prospects earlier for positive growth this year as several economic indicators and business sentiments noted improvements.

He says from next year, economic recovery is expected on the assumption that the current outbreak is controlled, herd immunity is achieved through vaccination, and borders re-open towards the latter part of 2022.

Ali says while the economic recovery from next year is contingent on the resumption of tourism activity, visitor arrivals are not expected to return to pre-pandemic levels for some time.

However he says since the current outbreak has yet to peak and there remains considerable uncertainty on its future evolution and impact on Fijian lives and the economy, the economic outlook could deteriorate further.

Ali says the balance of risk to the current economic outlook is heavily tilted to the downside.

These include further delays in controlling the recent outbreak of the virus locally, inability to achieve herd immunity, the persistence of the virus globally (especially amongst our major trading partners), and further delays in the resumption of tourism activity.

Ali says the ongoing threats from natural disasters and the recent upswing in commodity prices constitute other downside risks. He says given the economy’s precarious outlook, economic recovery is critically dependent on the successful containment of the outbreak in the near term and the re-opening of borders for international tourism as local conditions allow.

Ali says a large part depends on achieving herd immunity by ramping up our current vaccination efforts.

He says it is encouraging to note that around 50% of our adult population have already received the first dose of the vaccine.

The Macroeconomic Committee says based on the current inoculation trend, Fiji will be close to herd immunity by the end of October this year.

Ali says it is therefore critical that macroeconomic policies remain geared towards adequately resourcing the health and other frontline agencies to contain the pandemic whilst at the same time ensuring adequate social protection for households impacted by the outbreak and the containment measures.

He says in addition, carefully re-opening businesses within the required health and safety parameters is also crucial for maintaining jobs and livelihoods.

Ali says in contrast to the challenges faced by the pandemic in the real sector, Fiji’s external position has improved substantially.

Foreign reserves are currently just over $3.1 billion and sufficient to cover 11.1 months of retained imports of goods and services and have been boosted by lower imports; increased personal remittances and official aid; external borrowing by the Government; and the sale of Energy Fiji Limited’s shares.

The committee says the recent announcement by the International Monetary Fund to distribute US$650 billion to its members through additional Statutory Drawing Rights allocations will further boost our foreign reserves by around $265 million in the coming months.

It says as a result, foreign reserves are projected to remain at comfortable levels over the medium term.

The Macroeconomic Committee is made up of Heads and senior representatives from the Ministry of Economy; Fiji Bureau of Statistics; Ministry of Commerce, Trade, Tourism and Transport; Office of the Prime Minister; Investment Fiji; Fiji Revenue and Customs Service and the Reserve Bank of Fiji.

Credit Corp Fiji Care
Credit Corp Fiji Care
Fiji Water's $140M capacity expansion boosts employment and sustainability efforts
Fiji Water’s latest capacity expansion in Ra builds on their efforts to provide an innovative and safe workplace with long-term career development ...
20 hours ago
Relief at Veinuqa District School as new bridge ends years of creek crossings
Students and teachers of Veinuqa District School in the interiors of Namosi are relieved as after years of crossing the creek in front of the school, ...
42 minutes ago

$596,300 new storage facility to open for disability service providers
In pursuit of inclusivity and support for persons living with disabilities, the construction of a $596,300 storage facility for the National Council ...
1 hour ago

Tukini Cama, a phenomenon and showman - Parkinson
One of greatest and legendary radio personalities in the 1990s and early 2000s, Tukini Cama will be laid to rest in Vuci, Tokatoka, Tailevu this ...
17 hours ago

Nakasi High head girl leads with determination despite challenges
Nakasi High School head girl Esther Kuva is gearing up for a year filled with responsibilities and challenges and she is an inspiration to other ...
19 hours ago

Ra families seek urgent Govt aid as children swim across dangerous river
Families of Cavucavu and Namonamo settlements in Mataso, Ra are calling on the government to provide urgent assistance as there are children swimming ...
21 hours ago

fijivillage Straight Talk with Vijay Narayan
Latest Videos

Stay tuned for the latest news on our radio stations

CFL radio frequencies
Kishore Kumar Trial
Kishore Kumar is charged with allegedly making false claims on his Facebook page, Kishore Kumar Publications that there was a porn video of ...
3 days ago

Concerns raised regarding the state of CWM Hospital
General and Chief Pediatric Surgeon at the CWM Hospital, Dr Josese Turagava says due to the increase in the number of people who are moving to the ...
4 days ago

HSBC Perth 7s 2024
The Fiji Airways Men’s National 7s side secured a 4th place finish at the HSBC Perth 7s while the Fijiana 7s finished 8th in the Women’s ...
20 days ago