Economy forecast to grow by 12.6%: World Bank

September 28, 2022 6:10 am

[File Photo]

The World Bank in its latest East Asia and Pacific Economic Update is estimating that the Fijian economy will grow by 12.6 percent this year.

The update with the theme “Reforms for Recovery’ states this will be underpinned by an expected 55 percent increase in visitor arrivals to pre-pandemic levels.

World Bank’s Chief Economist, Aaditya Mattoo, says this double-digit recovery is primarily driven by services-related sectors such as accommodation, transport, wholesale, finance, and insurance.

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Mattoo says the opening of Fiji’s international border in December last year significantly boosted economic recovery.

“Fiji is one of the countries where we have seen a substantial revision of the growth forecast, they nearly double the forecast from six percent to more than 12 percent for 2022. I think the reason is the revival of tourism. It’s really striking, we look at the chart in the report which shows the return of tourists, how much in fact Fiji stands out as a country which has been able to bring back tourists.”

Mattoo further explains that the projections indicate that economic recovery will reduce Fiji’s extreme poverty from 3.7 percent in 2021 to 2.4 percent this year.

He adds this is still above the pre-pandemic rate of 1.3 percent in 2019, which was also the latest estimate based on household survey data.

The Chief Economist says actual poverty reduction is dependent on the extent to which economic recovery leads to jobs for low-skilled workers and the effectiveness of government support to vulnerable households.

The Economic Update also projects the growth next year to be 7.8 percent from an expected 85 percent of tourist arrivals at 2019 levels and 4.6 percent in 2024, assuming full tourism recovery to the pre-pandemic level.

However, Mattoo says risks that could derail the growth outlook include a drawn-out Ukraine war, natural disasters, and re-emergence of a pandemic.