As confidence builds, higher growth forecast

The economy of Fiji is robust and with the return of business confidence, future prospects for growth are bright, Reserve Bank of Fiji Governor Barry Whiteside said.

Addressing the members of a business delegation from New Zealand in Suva on August 1, 2013, he said that Fiji would follow New Zealand’s projected growth of 2.7% this year, while Australian economists had predicted their country’s rate of economic growth would be about 2.5%.

However, a day later, Mr Whiteside, who is also the Chairman of the Macroeconomic Policy Committee, said that the Fijian economy would expand by 3.2% this year.

“After a detailed reassessment of the relevant data and information available, this revision from the earlier growth forecast of 2.7% announced in the 2013 National Budget would be possible,” he said.

The revised growth projection for 2013, if achieved, will be the highest since 2004.

According to him, growth this year is projected to be broad-based with positive contributions from all the sectors, except for the mining and quarrying sector.

The contraction in the mining sector reflects lower production levels and is largely due to the extraction of low grade ore by the Vatukoula Gold Mines Limited. The manufacturing; agriculture; wholesale and retail trade; communication; financial intermediation; construction and the transport & storage sectors provide the major impetus to the 3.2% growth in 2013.

The main drivers for the upward revision in growth this year are due to better-than-expected performances in the wholesale & retail trade; communications; construction and the transport & storage sectors.

According to Mr Whiteside, the revised growth projection reflected the growing sense of optimism in the economy and was consistent with the strong growth in various partial indicators.

“These included net Value Added Tax collections, inward personal remittances, domestic cement sales and borrowing by the private sector for consumption and investment purposes. This is further validated by the Bank’s Business Expectations and Retail Sales Surveys and direct feedback from a wide cross section of industries and sectors,” he said.

He added that the upward revision to the economic growth projection mirrors the increased investment by the private sector, statutory corporations and Government, which is estimated at 28% of Gross Domestic Product for 2013.

Mr Whiteside said that the Fijian economy is estimated to have grown by 2.2% in 2012, marginally lower than the earlier forecast of 2.5%.

“This was because of lower-than-expected tourist arrival and decline in sugar cane and gold production,” he said.

Photo : Barry Whiteside speaking to the New Zealand delegation on August 2

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