Fiji’s economy expected to grow by 2.6% this year – World Bank

The World Bank says Fiji’s economy is expected to grow by 2.6% this year.

It says Tropical Cyclone Harold compounded the negative impact of the COVID-19 pandemic causing a 19% contraction of the Fijian economy in 2020.

In its East Asia Pacific Regional Overview, the World Bank says Pacific Island countries’ economies, which were devastated by the collapse in global tourism and travel and where the recovery is expected to be more prolonged are anticipated to grow well below pre-pandemic rates this year.

It says the pandemic could last longer than expected, the long term damage from last year’s recessions could be deeper than anticipated, balance sheet stress could intensify, or the contraction in global trade could be sharper or longer lasting.

The World Bank further says more countries in the region could experience difficulties with procurement and distribution of the vaccine than currently anticipated.

It says although the pacific region entered the pandemic with relatively robust monetary and fiscal policy frameworks, most countries are expected to face substantial deterioration in fiscal positions and elevated debt.

It further says the rapid deployment of an effective vaccine could trigger a stronger than expected rebound in major economies and in global demand.

The global economy is expected to expand 4% in 2021, assuming an initial COVID-19 vaccine roll-out becomes widespread throughout the year.

The World Bank says a recovery will likely be subdued, unless policy makers move decisively to tame the pandemic and implement investment-enhancing reforms.