Pacific Islands advised to ensure debt sustainability
May 21, 2019 12:45 pm
Pacific Island countries including Fiji have been urged to ensure debt sustainability by improving debt management, quality of spending, and building fiscal space.
The World Bank’s East Asia Pacific Economic Update, for April says that while Pacific Island nations have a relatively low public debt, there are other factors that need to be looked at.
The report states that structural factors, including modest long-term economic growth prospects, high vulnerability to natural disasters, and high costs for public services and infrastructure, place the Pacific Island countries at high risk of debt distress.
The World Bank says growth in developing East Asia and the Pacific is projected to soften to 6 percent in 2019 and 2020, down from 6.3 percent in 2018.
This is due to largely reflecting global headwinds and a continued gradual policy-guided slowdown in China.
As the Reserve Bank of Fiji stated in its recent release, the World Bank update states that growth in Fiji is projected to continue to rise, albeit at a more tempered pace as reconstruction efforts near completion in the aftermath of tropical cyclones.
A fortnight ago, the Reserve Bank had announced revised projected growth of Fiji’s GDP.
The slowdown effect from the global economy has seen the RBF now forecast to grow by 2.7 percent, down from the earlier projection of 3.4 percent.