Economy can have a rebound of 11.5% if tourism activity is sustained and the 3rd wave is contained – Westpac

The latest Westpac Wave edition on Fiji’s Economic Update says that if Fiji is able to sustain momentum of tourism activity and the third wave of COVID-19 is contained, we anticipate a rebound of 11.5 percent for 2022.

The economic analysis report by Westpac also states that if increasing cases of COVID-19 in Fiji warrants return of travel bans with major source market countries and other restrictions, tourism activity will be vastly affected and hence growth outcome will be adversely impacted.

In that case, we expect a modest recovery for 2022 of around 5.0% driven mainly by base effect.

Westpac says the third wave of COVID-19 in Fiji, resulting in widespread community transmission and the impact of adverse weather patterns are now considerable risks.

Against this backdrop, they remain confident about a growth rebound for the Fijian economy in 2022 with the international border reopening being the decisive factor, although the magnitude of the growth will be slightly lower.

The Westpac Wave also expects the real GDP to rebound and grow by 8.5 percent in 2022 in the baseline scenario.

The economy is then likely to continue the momentum in 2023 with normalising of tourism activity, rise in business and consumer confidence as well as ongoing fiscal and monetary stimulus.

It says in Fiji, the setback to the economy from the second wave of the COVID-19 outbreak was significant; the Gross Domestic Product is estimated to have contracted by around 3.8 percent in 2021.

Westpac says the success of Government’s vaccination strategy last year, the earlier than anticipated reopening of international borders and subsequent resumption of travel and tourism activity, combined with substantial policy support, set the tone for an economic recovery this year.

It says overall, Fiji’s strategy on the health front has allowed the economy to reopen and activity to somewhat return.

Westpac says while challenges and risks remain in the form of the third wave of infections, new vaccine resistant variants, natural disasters, and the upcoming general elections, for now the economy has considerable momentum as it proceeds into 2022.

It also says since the reopening of our borders, there has been a surge of new infections as Fiji enters into the third wave of COVID-19 outbreak.

Westpac says there is an upward trend in both the new hospital admissions and total admissions in all hospitals for COVID-19 patients across the country and is consistent with the increasing cases and death trends.

It says this trend warrants continued administration of COVID-19 measures to contain and mitigate the third wave outbreak in Fiji and prevent significant and damaging social and economic outcomes.