The Reserve Bank of Fiji has revised its projections for economic contraction saying it is expected to be smaller than initially anticipated. [File Photo]

The Reserve Bank of Fiji has revised its projections for economic contraction saying it is expected to be smaller than initially anticipated.

The economy is likely to contract by 19.0 percent this year, compared to the earlier estimate of 21.7 percent thanks to higher-than-expected growth in the agriculture sector.

The RBF adds this result is also accredited to lower-than-anticipated declines in various sectors including the wholesale & retail, trade, restaurants and hotels, manufacturing and construction sectors.

Next year’s projected recovery largely hinges on the opening of international borders and the resumption of travel.

Growth may range between 1.6 percent and 8.0 percent given the substantial uncertainties around the reopening of borders for quarantine-free travel and appetite for tourism activity.

Cumulative to October, visitor arrivals declined by 80.7 percent as a consequence of the prolonged closure of international borders.

Net Value Added Tax collections fell by an annual 41.1 percent cumulative to October while commercial banks’ new lending for consumption purposes also fell by 26.8%. New lending for building & construction declined by 24.9 percent.

The RBF Job Advertisement Survey registered a 64.3 percent decline in vacancies in the year to October, underpinned by reduced recruitment needs across all major sectors of the economy.