IMF predicts Fiji’s economy to grow by about 7.5% this year

Fiji’s economy is expected to grow at about 7.5 percent this year, according to the International Monetary Fund.

The Head of IMF Mission to Fiji, Marshall Mills says they expect output to roughly reach the pre-pandemic level this year or next year and with continuing reforms, growth could remain strong and above 3 percent for the next few years as the recovery completes and hopefully momentum is maintained through confidence.

Mills says they expect inflation to remain stable and for the current account deficit to remain at manageable levels and below what it is now.

Mills further says Fiji is experiencing strong economic recovery from the pandemic.

He says real GDP growth rebounded by an estimated 16 percent in 2022 driven by strong revival in tourist inflows.

Mills says supported by strong economic recovery, fiscal deficits are falling from 12.2 percent in the last financial year to a projected 7.7 percent for this financial year.

He says the central government debt remains stubbornly high at around 85 percent of the GDP.

Mills says with the stabilization in global commodity prices and the still partial recovery in tourism, the current account deficit remained at an estimated 14 percent of GDP in 2022.

He says however, foreign exchange reserves remained relatively comfortable at 6.2 months of prospective imports, cushioned by occasional financing from donors and remittance.

The Country Mission Head further says Fiji’s high debt deprives it of the fiscal space to respond to shocks.

Mills adds spending should be disciplined and gradually reoriented to boost growth, enhance resilience and promote inclusion.