Focus on job creation

THE Westpac Bank’s economic outlook says with hopes now on the 2021-2022 National Budget, the focus is expected to be on job creation, particularly in tourism, unemployment benefits in terms of safety nets.

According to the bank the bottom line for the budget would have to be to contain the COVID-19 pandemic in Fiji and its readiness for travel and tourism activity, preferably by early next year.

“Fiji’s public finances have held up much better than earlier anticipated and we expect the budget to show smaller fiscal deficit (around 12 per cent to 15 per cent of GDP) compared with the 20.2 per cent of GDP projected last year.

“For the new fiscal year, however, the fiscal deficit is expected to be higher than the 5.0 per cent target, particularly because the economy is no longer expected to rebound this year,” stated the bank.

“Additionally, to cater for the impact of the pandemic on Fiji, expenditure is expected to be propped up and revenue is still projected to be lower than anticipated earlier.

“The Government needs to keep hopes for the recovery alive and kicking and on a sustainable path. The best way to support the economy is to keep the foot on the accelerator with more targeted spending in this year’s budget.”

Meanwhile the outlook also highlighted that any economic recovery hinged on how fast this second wave of infections was contained to allow resumption of international tourism.

The bank also cautioned that the outlook was subject to considerable uncertainty, adding that a more persistent pandemic, financial sector stress and any natural disaster could derail the recovery next year.