The Reserve Bank of Fiji Governor and Head of the Macroeconomic Committee, Ariff Ali says the second wave of the coronavirus outbreak of the highly contagious Delta variant in Fiji has thwarted all chances of an economic recovery this year.
While speaking on the revised growth projections for the Fijian economy for 2020 to 2023, Ali says the localised lockdowns in Viti Levu, restrictions on certain economic activity and movement of people, and the mandatory “COVID 19-safe” operational requirements for many businesses have further curtailed economic activity and raised the cost of doing business.
Ali says the high unemployment and under-employment situation has worsened from last year, and Government finances have taken another hit, thereby further suppressing domestic demand.
He says given these developments, the economy is forecast to contract further by 4.1 percent this year, driven by the services and industrial sectors, which are expected to more than offset the positive contributions from the primary sector.
The services sectors include accommodation and food services, transport and storage, public administration and defence, financial and insurance services, real estate, health, information and communication, education and other services.
The industrial sectors include manufacturing, construction, mining and utilities.
The primary sector include agriculture, forestry and fisheries.
The latest assessment by the Macroeconomic Committee shows that the Fijian economy is estimated to have contracted by 15.7% in 2020, lower than the 19% contraction estimated earlier.
Ali says the improvement is reflective of the latest available data, which show that major sectors such as finance, wholesale and retail trade, transport and storage, accommodation and food services, construction and information and communication performed better than initially expected.
He says nonetheless, 2020 still represents the most severe economic contraction in Fiji’s modern history, as the collapse in visitor arrivals reverberated across the economy.
