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Fijian economy growth set at 2.6%

January 6, 2021 4:45 pm
Ariel view of Suva City. [File Photo]

The World Bank is anticipating a growth of around 2.6% for the Fijian economy this year.

This comes as the World Bank predicts the global economy to expand by four percent this year, assuming an initial COVID-19 vaccine rollout becomes widespread throughout 2021.

In its January 2021 Global Economic Prospects report, it says a recovery, however, will likely be subdued, unless policy makers move decisively to tame the pandemic and implement investment-enhancing reforms.

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The report says for Fiji, Tropical Cyclone Harold compounded the negative impact of the pandemic causing 19% contraction in 2020.

The forecast growth for next year is 8.2 percent.

Despite this feel good figures and global economy growing again after a 4.3% contraction in 2020, the pandemic has caused a heavy toll of deaths and illness, plunged millions into poverty, and may depress economic activity and incomes for a prolonged period.

Growth in the East Asia and the Pacific region is projected to accelerate to 7.4% in 2021, led by a rebound in China.

This is predicated on the rollout of an effective vaccine in the first quarter of 2021 in major economies and later in smaller emerging market and developing economies.

The report goes on to say that economic activity in the region is expected to remain below pre-pandemic trend by late 2021, reflecting lasting damage from the COVID-19 shock.

Investment and productivity are expected to remain depressed and uncertainty is likely to remain elevated.

There are also risks that needs to be taken into consideration with as the pandemic could last longer than expected, the longterm damage from last year’s recessions could be deeper than anticipated, balance sheet stress could intensify, or the contraction in global trade could be sharper or longer lasting than envisioned.

The World Bank says more countries in the region could experience difficulties with procurement and distribution of the vaccine than currently anticipated.

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