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Fiji economic survey: low growth the new normal?

Gounder, Neelesh N. (2020) Fiji economic survey: low growth the new normal? Asia and the Pacific Policy Studies, 7 (2). pp. 145-157. ISSN 2050-2680

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    Abstract

    This article reviews the performance of the Fijian economy from 2015 to 2019. After several years of decent growth (around 5%), GDP growth fell to as low as 0.5% in 2019. Earlier hopes that a ‘new normal’ of GDP growth of around 5% per annum had been established have faded. The principle reason for this, it is argued, is a lack of business confidence, which is associated with the 2018 elections, but more fundamentally with a lack of faith in Fiji's political system. At the same time, the government has also been forced to embark on a course of fiscal consolidation, as announced in the 2019–2020 National Budget, due to disappointing revenue collections and undisciplined expenditure in earlier years. The banking sector is hamstrung by a lack of liquidity. This article is written to understand the Fijian economy pre‐COVID‐19, but with the sharp downturn in economic growth in particular due to the impact of the COVID‐19 virus on tourism—Fiji's most important sector—and no room for fiscal expansion, growth prospects in Fiji are currently not bright. An improved medium‐term outlook will require greater confidence (both political and economic) to increase investment, both foreign and domestic. Reforms to reduce the costs of doing business will also help.

    Item Type: Journal Article
    Subjects: H Social Sciences > HC Economic History and Conditions
    Divisions: Faculty of Business and Economics (FBE) > School of Economics
    Depositing User: Neelesh Gounder
    Date Deposited: 14 Aug 2020 13:18
    Last Modified: 14 Aug 2020 13:18
    URI: http://repository.usp.ac.fj/id/eprint/12276
    UNSPECIFIED

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