Fijian economy to do better than RBF forecast

Reserve Bank of Fiji Governor Ariff Ali presented a report on the state of Fiji’s economy during the 2018 Pacific Update jointly hosted by University of the South Pacific and Australian National University.

He highlighted that the economy was set to achieve nine years of consecutive economic growth never achieved in Fiji’s history and bearing any external shock, it was set to grow for an additional three years.

He pointed out that the recent growth had been above Fiji’s historical growth rate of 2.8 per cent and growth between 2017-2021 is all projected at above this rate.

He added that Moody’s Rating Agency had also commended Fiji’s economic performance by stating in its recent report that “Fiji’s economy is smallest among peers, but wealthier than some with larger economies”.

Mr Ali highlighted that the projections of Fiji’s economic growth by the Macroeconomic Committee was in line with those forecast put out by the International Monetary Fund, Asian Development Bank, Moody’s and ANZ.

However, it was surprising to note that USP’s senior lecturer in economics, Rup Singh, is a bit more optimistic on the Fijian economy expecting a slighter better out turn for the next two years.

Data showed that the key consumption and investment indicators were robust and this was supported by the Business Expectations survey undertaken by RBF.

This is reflected in optimism by the private sector credit with new loans by commercial banks rising to an all time high of $2.7 billion in 2017, almost twice the value in 2013 and more than three times the value in 2006.

Commenting on monetary policy, Mr Ali said that the accommodative monetary policy stance reflected that its twin objectives were intact and as such assisted in the reduction in commercial bank lending rates to historical lows.

It reached a stage where consumers and businesses were benefitting. On the question; if the growth in economic activity was translating into more employment? he replied that the unemployment rate is at a 20-year low at 4.5 per cent.

And more than 41,000 new compulsory members have joined FNPF in the past five years.