Potential for growth
THERE isn’t any industry in particular that can replace the tourism industry, however, we could start working on other sectors that have potential to contribute to economic growth.
Reserve Bank of Fiji (RBF) governor Ariff Ali made the comment during his presentation on macroeconomic outlook and living with global shocks at the TOPEX 2022 yesterday.
The governor highlighted the challenges the economy went through in the past three years and the strength of the recovery efforts.
While he applauded the turnaround in the economy, Mr Ali also subtly cautioned against expecting too much too soon.
“We are coming from a deep contraction of the past two years and we must ensure there is as much recovery as possible before we start tightening the policies,” he said.
Mr Ali said there had been much concern raised by commentators on government spending during these times and he said it was normal for governments to borrow to be able to stimulate the economy.
He added that the private sector was an important contributor and stimulator of economic growth, adding that the RBF forecast was for 15.6 per cent growth this year.
“We have revised GDP growth three times this year and we are looking at 15.6 per cent growth later this year.”
Mr Ali said visitor arrivals had surpassed their forecast which was another positive outlook for the economy.
“At this time last year we would have taken 35 per cent visitor arrivals, but we went for 50 per cent because of the forward bookings which looked promising. In the last couple of months arrivals have been growing at 90 per cent – Australian arrivals for the past few months have been better than 2019.
“We had revised our visitor arrivals to somewhere around 65 per cent and we already have crossed 66 per cent. We had 66 per cent visitor arrivals in the first 10 months of this year.”
Mr Ali highlighted that VAT collections in the first 10 months of this year was exactly the same as 2019.
He said while the number of people employed in November was slightly below the rates of 2019 the total incomes or salaries recorded was more than what it was in 2019.
Other highlights included new lending at the first 10 months of this year was which stood at $2.8 billion – much more than that of 2018.
Fiji’s fuel dependency was also highlighted by the governor with the recommendation to reduce the fuel import bill.
Nevertheless, Mr Ali said they expected the economy to have a strong rebound.