Fiji not alone

National Federation Party is of the view Fiji’s economic situation should not be blamed only on COVID-19, but on Government.

Party leader Biman Prasad told Parliament last Friday: “It has taken COVID-19 to show the stark reality of what some of us in NFP and in the Opposition and others outside of Parliament, were saying about this Government.

“This is a Government which, for the past four or five years, has been reckless and wasteful, spending and borrowing. Today, when the pandemic has hit us, we are obviously in a much more difficult and worse situation than we were.”

But, Fiji is not the only country whose economy has suffered. Australia has gone into recession, first time in 30 years. If Mr Prasad’s logic is to be employed here, would he also blame the Australian Government for spending recklessly leading to recession? Not at all.

Fact checking and reality of the world

BBC reported: Australia’s economy has plunged into its first recession in nearly 30 years, as it suffers the economic fallout from the coronavirus.

Gross domestic product (GDP) shrank seven per cent in the Aprilto-June quarter compared to the previous three months.

This is the biggest fall since records began back in 1959 and comes after a fall of 0.3 per cent in the first quarter.

An economy is considered to be in recession if it sees two consecutive quarters of negative growth. Australia was the only major economy to avoid a recession during the 2008 global financial crisis – mainly because of the demand from China for its natural resources.

France 24 reported:

Britain’s economy shrank by a fifth in the second quarter, higher than any European neighbour, as the coronavirus pandemic slammed businesses and plunged the country into a record recession. “It is clear that the UK is in the largest recession on record,” the Office for National Statistics said after gross domestic product (GDP) contracted by 20.4 per cent in AprilJune.

Britain’s recession – its first since 2009 amid the global financial crisis – was confirmed after two quarterly contractions in a row. GDP shrank 2.2 per cent in the first three months of this year.

The statistics office said that the contraction for the first six months of 2020 “was slightly below the 22.7 per cent seen in Spain but was more than double the 10.6 per cent fall in United States GDP over this period”.

New Zealand’s economy shrank by 1.6 per cent in the March quarter, the largest drop in 29 years and the first quarterly fall since December 2010, as the initial effects of coronavirus curbs paralysed activity. India, a country which is almost self-sufficient, noted a 24 per cent contraction. With the coronavirus spreading faster in India than anywhere in the world, the Indian Government on Monday announced the country’s biggest economic contraction in 24 years.

India’s National Statistical Office said the economy contracted by 23.9 per cent in the first quarter of the 2020-2021 fiscal year, which ended in June, compared with the same quarter the previous year.

That’s its worst performance since the Government began publishing quarterly gross domestic product figures in 1996. And it’s the worst decline among the world’s major economies releasing GDP figures for that same quarter, according to data from the Organisation for Economic Co-operation and Development.

“This year, we are facing an extraordinary situation,” India’s Finance Minister, Nirmala Sitharaman, told a conference last week before the GDP figures were released. “We are facing an act of God.”

Singapore fell into recession for the first time since the global financial crisis, with gross domestic product contracting by 41.2 per cent in the second quarter after the citystate imposed a lockdown to battle coronavirus.

The quarter-on-quarter squeeze in gross domestic product was the largest on record, according to preliminary figures from the trade and industry ministry, following a 3.3 per cent contraction in the first quarter. The economy shrank by 12.6 per cent year-on-year — the largest drop since independence in 1965 — owing to “circuit breaker” measures imposed from April 7 to June 1 that forced non-essential businesses to close. Economists polled by Reuters had forecast a 10.5 per cent fall.

Fiji is in no way alone in the difficulties we are facing.