ANZ expects economic boom after elections
October 2, 2014 7:46 pm
The ANZ Bank says the challenge for Fiji’s new leadership is to maintain growth through increased regional and international trade and foreign investment.
Reacting to the successful completion of elections and the appointment of a government, ANZ CEO Pacific & Fiji Vishnu Mohan says he has the highest confidence in Fiji’s future.
Vishnu Mohan says Fiji has come a long way and the signs are evident of a strong economy with vast potential for sustainable growth.
He adds the macro-economic outlook in Fiji is bright; as private lending climbed sharply by 17 per cent. The key drivers for this were income tax cuts, lump sum pension fund payments and car loans going up by 200 per cent.
Business lending is up -20 per cent, which signals the private sector is buying into a positive election result.
The International Monetary Fund, World Bank and Asia Development Bank and bi-laterals Australia and New Zealand are keen to get aid back to Fiji. This will be in the form of large infrastructure projects, re-establishing stronger links.
ANZ Economics have upgraded its forecast for 2014 real GDP growth to 4.0 per cent.
This is based on higher fiscal stimulus announced in the national budget, new 2008 GDP base, stronger credit growth, a likely investment surge post elections.
Near-term economic activity is expected to be buoyed by infrastructure projects such as the Damodar City project in Suva, upgrade of Nadi International Airport and various large hotel and resort developments, which will have positive spill-over to the tourism-related sectors.
In terms of international trade Vishnu says trade between Fiji and the World climbed to nearly 5.7 billion dollars last year – an increase of one point nine billion dollars from five years ago.
The blue bank says signs of economic health in Fiji are robust and now the election has removed an enduring geopolitical uncertainty – not just domestically but for international investors and governments.