The domestic economy is expected to expand by 2.4% this year however at a slower pace than the 3.5% forecast a year earlier.
The good news is that the Fijian economy is expected to grow by 3.6% in 2017, higher than the 3.1% earlier anticipated.
This is despite the devastating impact of Tropical Cyclone Winston and the floods in April.
The Chairman of the Macroeconomic Committee and the Governor of the Reserve Bank of Fiji, Barry Whiteside has announced that the downward revision to this year’s growth largely resulted from the recent natural disasters which caused huge damage to infrastructure, loss of output especially in the agriculture sector and reduced production time of businesses.
However Whiteside says the revised growth for this year also takes into account an expected pickup in construction activity led by post‑cyclone reconstruction and rehabilitation work.
In addition, wholesale and retail activity is also expected to increase as households replenish domestic items and increase purchases of reconstruction materials, facilitated by the assistance provided through the Fiji National Provident Fund, Social Welfare benefits and the Help for Homes initiatives following Cyclone Winston and the floods.
The sectors driving growth this year include the transport and storage, wholesale and retail trade, construction, accommodation and food services, financial and insurance activities and the public administration and defence sectors whose positive contributions outweigh the declines in the agriculture, electricity and forestry and logging sectors.
On the upside, strong tourism demand, growing inward remittances and improved investor confidence should provide added impetus to growth.
Foreign reserves are around $2 billion as at today, equivalent to around 5.7 months of retained imports of goods and non‑factor services and are expected to remain stable during the year.
