Budget 2021-22

Management of the economy post-COVID critical: AG

June 29, 2022 6:50 am

National debt was again a hot topic during the National Budget Consultation held in Nadi yesterday.

Minister for Economy Aiyaz Sayed-Khaiyum says borrowing money to help develop the standard of living of Fijians during a global crisis is essential, adding that most of the interest rates from borrowings that the government made to the Japanese and World Bank are well below percent.

He says many of these loans are on a 40-year payment term with a 10-year grace period, which means that, in some cases, we will be paying back only 40 percent

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of what we initially borrowed because the value of money drops over a significant period of time.

“As a result of the changes we made and the policy steps we took, the foreign currency levels are very good, our exchange rate is stable, we did not devalue the dollar, and a lot of Fiji don’t appreciate this. If the economy was not managed well, with inflation going up and the foreign reserves going down, our dollar would have devalued.”

The Minister for Economy says that the alternative of not borrowing and supporting the economy during the last two years would have been catastrophic.

Sayed-Khaiyum says Fiji lost billions of dollars due to the COVID-19 pandemic and trying to re-cover these lost grounds will require critical economic management so that we do not replicate what happened in the Sri Lankan economy or worse.

He adds that the government is working strategically so that the value of the Fiji dollar does not decrease.

The Minister will be continuing with his national budget consultation in the North from Thursday.