Need for diversified sources of growth: Chief Economist

September 29, 2022 6:40 am

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High dependence on tourism is a risk to sustained recovery, says the World Bank’s Chief Economist, Aaditya Mattoo.

Mattoo says Fiji’s adoption of the WHO’s best-practice standards and protocols and high COVID-19 vaccination rate resulted in the reopening of international borders in December 2021, which stimulated economic recovery.

However, he has highlighted the need for diversified sources of growth.

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”It does in the longer term need to diversify from this huge dependence on tourism which accounts for 1/3 of the GDP and I think those are the questions of the kind of structural reforms that Fiji needs to implement now to encourage the growth of other industries. It’s already broken into certain aspects of garments and other sectors but I think the longer term growth prospects will depend on sustainable macroeconomic policy as well as reforms that encourage diversification beyond tourism.”

In its latest East Asia and Pacific Economic Update, the World Bank 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.

It states that the key drivers of growth include the services, industrial, and primary sectors, in line with the rebound in travel and tourism.

It also states that risks that could derail the growth outlook include a drawn-out Ukraine war, natural disasters, and the reemergence of a pandemic.