The Fijian Government has welcomed the revision of the projected economic growth figure from 2.7 to 3.2 per cent by the Reserve Bank of Fiji.
Permanent Secretary for Finance Filimone Waqabaca said there was an air of confidence and optimism in the country which augured well for the government’s medium term target of five per cent growth.
He said Government would continue to strive for this by working with the private sector, civil societies and other stakeholders to build a better, stronger and sustainable performing Fijian economy.
“Our aim though in the medium term is for 5 per cent growth and Government will continue to strive towards this,” he said
“It is not impossible and I am optimistic that we can achieve our target growth.”
The 2.7 per cent growth figure announced in the 2013 Budget was derived from estimate figures available at that time.
“After the first half of 2013, the RBF is now in a better position to revise the projected figure and certainly the sectors that have led to the upward revision are sectors performing quite well,” he said.
Reason for robustness
Mr Waqabaca said the robustness in the wholesale and retail sector was the result of Government putting more money in hands of the people.
This was by increasing the tax threshold from $15,000 to $15,600 and reducing the tax percentage from 25 per cent to seven per cent for the lowest band.
He said Government had also provided strong support of several sectors such as the textile and footwear sector, the agricultural sector and tourism amongst others.
There were stimulus given to investors at various levels including the declaration of tax free zones and duty free goods.
Growing optimism
Reserve Bank of Fiji Governor and Macroeconomic Policy Committee chairman Barry Whiteside, said the revised growth projection reflected the growing sense of optimism in the economy and was consistent with the strong growth in various partial indicators.
The other sectors that provided impetus for the upward revision in growth included communication, financial intermediation, construction and the transport and storage.
Mr Whiteside said: “After a detailed reassessment of the relevant data and information available, the domestic economy is now forecast to expand by 3.2 per cent this year.”
He added the upward revision to the economic growth projection mirrored the increased investment by the private sector, statutory corporations and Government, which is estimated at 28 per cent of Gross Domestic Product (GDP) for 2013.
IMF projections downgraded
The additional growth of half per cent will come as a relief for Fijians since the International Monetary Fund has downgraded global growth projections from 3.3 per cent to 3.1 per cent.
This has been attributed to the risks in key emerging countries such as China and India together with deeper recession in Euro Zone and slower growth in the United States economy.
According to the IMF, despite its bounce back status, the US economy will only be growing by 1.7 per cent in 2013 while Fiji’s neighbours Australian and New Zealand economies are expected to expand by 2.5 per cent and 2.7 per cent, respectively.
Mr Whiteside said: “The GDP growth forecasts for 2014 and 2015 have been revised upward to 2.5 percent and 2.4 percent, respectively.”
– MINFO NEWS
Permanent Secretary for Finance Filimone Waqabaca.