June 22, 2013

Growth affects Fiji

Ropate Valemei
Saturday, June 22, 2013

FIJI is a small open economy — so what happens globally will generally find its way back to us in one form or the other.

While global growth is trending upwards, Reserve Bank of Fiji governor Barry Whiteside said it was really being pulled along by growth in the major emerging economies. In contrast, Mr Whiteside said slowdowns were forecasted for most of their trading partners this year, with much of the Eurozone in recession and had been there for the past four to six quarters.

However, Mr Whiteside said those would not dampen Fiji's recent domestic output and the forecasts set for the near term.

Speaking at the launch of BSP Life's new insurance product recently, he said the country's gross domestic product growth this year was forecasted at 2.7 per cent, a little improvement on the 2.5 estimation for last year.

"An important takeaway is that our growth is broad-based with almost all sectors making a positive contribution.

"In 2013, growth was being led by agriculture, manufacturing, and the finance and construction sectors.

"While we know that investment is the 'driver' of growth, it is the private sector that is the recognised 'engine'."

This, he said was clearly not the case in 2010 when the private sector contributed just 3.5 per cent to the overall 13.5 per cent investment-to-GDP number.

"I am pleased to say that we have seen a turnaround through 2012 and now into 2013," Mr Whiteside said.

He said indicators were showing high growth, led by greater lending by financial institutions for investment purposes as well as strength in building and construction activity.

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