Fiji’s economy stable despite global slowdown, IMF recommends rationalising current spending

The Fijian economy remains stable in the Global economic slowdown currently being faced. But the Fijian Government could also look into rationalising its current spending for projected future growth. These were the sentiments of the International Monetary Fund (IMF) Mission Head for Fiji and Deputy Chief of Regional Studies Division, Pablo Murphy. Mr Murphy spoke at the Reserve Bank of Fiji Seminar Series titled ‘Global Developments and Prospects: Implications for Fiji’ held in Suva last night. He said Government was doing a great job in the expansion of the private sector and in trying to improve the business environment during this global economic slowdown.

“These initiatives that the Government has in place at the moment are really important for Fiji during these phase of global economic slowdown,” Mr Murphy said.

“I think all these reforms that the Government is focusing on are very important for the economy. “Government is fully supporting the protection of public investments and the need to strengthen their reliance to the Fijian economy,” he said.

“That goes in the right direction which is working with the International Finance Corporation (IFC) and the government of Singapore

to try and reduce the cost of tax compliance, improve access to credit, improve foreign investments.”

He said there was a need for rationalising current spending where there was a big expansion in the last three years.

“That’s our recommendation, a need for rationalising current spending.

“We think the reform efforts that the government is pursuing are in the right direction, I guess the priority the government has is to strengthen the business environment which is really necessary for Fiji at this stage.”

Other recommendations by the IMF included:

·Need for maintaining macroeconomic stability

·Fiscal prudence is important, reduce wastage, cut recurrent expenditure where possible and ensure that debt is always sustainable.

·For the Reserve Bank, although the economy is sustainable, they should keep a close eye on nonperforming loans.

·There is a need to improve business confidence.

·Empower women by increasing their labour force participation, not only by taking a step forward in addressing social issues but at the same time the potential for economic benefits that could be of good to the nation.

There is a need to improve business confidence.