Economic outlook uncertain: World Bank
September 29, 2020 4:56 pm
Fiji’s short-term outlook is uncertain and depends on the length of the COVID-19 crisis, the severity of the disruption to the global economy, and the impact on the mainstay of the Fijian economy – tourism.
The economy is expected to contract this year but return to trend from next year with growth strengthening to around 3 percent in 2021–22 if the COVID-19 crisis is contained.
The 2020-21 national budget set out an ambitious commitment to fiscal consolidation driven by expenditure reduction, stabilization of capital spending and tighter control over recurrent spending.
The government announced on March 26 an economic package of over one billion dollars, equivalent to around 8.7 percent of GDP, in its COVID-19 response budget.
The package includes allocation of resources for containment and treatment of the virus; fiscal support to minimize economic disruptions; targeted spending and fiscal measures to boost disposable income and assistance for business.
The deficit is expected to be financed through domestic borrowing as well as funds from the Asian Development Bank and the World Bank.