8% Growth: RBF

Tax policy uncertainty in headwinds

Uncertainty surrounding tax policies coupled with the extent of fiscal consolidation in the upcoming National Budget are among domestic headwinds identified by the central bank, in its most recent macroeconomics projections.

Reserve Bank of Fiji Governor,

Ariff Ali, said despite the upward revision to the growth projection for this year, risks to the outlook tilted to the downside.

“Global headwinds are from the continued geopolitical tensions, rapid interest rate hikes in advanced economies and the possibility of global recession,” he said.

“Domestic headwinds include uncertainty surrounding tax policies and the extent of fiscal consolidation in the upcoming national budget, high emigration, climate change, and natural disasters.

“The next review of macroeconomic projections is scheduled for the last quarter of 2023.”

Investment lending up

The Reserve Bank said new lending for investment purposes were on the increase.

And visitor arrivals were expected to return to 2019 level this year.

“This coupled with recent economic data, the growth projection for the Fijian economy in 2023 is revised upward to 8.0 per cent from the 6.0 per cent envisaged in November 2022,” Mr Ali said.

“For 2022, given the better-thanexpected rebound in tourism and related sectors, the Fijian economy is estimated to have grown by 18.6 per cent, higher than the 15.6 per cent previously projected.”

The service sector and net indirect taxes contributed the most to the revised growth estimate, Mr Ali said.

“In 2024 and 2025, Fiji’s economy is forecast to return to the prepandemic trend and grow by 3.8 per cent and 3.0 per cent, respectively,” he said.