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IMF Staff Completes 2019 Article IV Visit to Fiji

December 12, 2019

End-of-Mission press releases include statements of IMF staff teams that convey preliminary findings after a visit to a country. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF’s Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF's Executive Board for discussion and decision.

  • The economy has slowed down as lower government spending, tighter financial conditions, weak confidence, and the global slowdown have weighed on economic activity.
  • A key priority should be to rebuild fiscal buffers in a growth friendly way to create space to respond to future natural disasters and to maintain public debt sustainable.
  • Improving the business environment and strengthening governance is warranted to mobilize the private sector, increase competitiveness, and lift GDP growth as policy support unwinds.

An International Monetary Fund (IMF) team led by Mr. Pablo Lopez Murphy visited Fiji from December 3 to December 13, 2019, to conduct the discussions for the 2019 Article IV consultation. At the conclusion of the visit, Mr. Lopez Murphy issued the following statement:

“The Fijian economy experienced relatively high growth during 2017-18 amid rising external and fiscal imbalances. Fiscal space is now limited and risks to external stability remain significant. Economic activity has slowed sharply in 2019 due to lower government spending, tighter domestic financial conditions, weak sentiment, and the synchronized global downswing. Growth is expected to reach about 1 percent in 2019, underpinned by resilient tourism and remittances. GDP growth should pick up gradually as the private sector regains dynamism. Inflation pressures are subdued.

“Risks to the economic outlook are tilted to the downside. They stem from an increasing public debt-to-GDP ratio, natural disasters, higher oil prices, slower growth in main trading partners, and delays in implementing structural reforms to mobilize private investment. On the upside, the new air routes and code share arrangements with European and Indian carriers may boost the tourism sector.

“Policies should aim to sustain growth and make it more inclusive as fiscal policy support is withdrawn and external imbalances narrow. Reducing fiscal imbalances is essential to rebuild buffers to respond to natural disasters and to maintain public debt sustainable. Fiscal consolidation should focus on reining in current spending given limited scope for further revenue mobilization and the need for capital spending to improve resilience to climate change.

“Improvements in the business environment and in governance are essential to raise potential growth and needed private investment, and to enhance productivity and competitiveness. A key priority must be to tackle the gender gap in labor force participation in order to boost potential growth and make it more inclusive.”

The team had fruitful discussions with the Minister of Economy, the Permanent Secretary of the Ministry of Industry, Trade & Tourism, the Governor of the Reserve Bank of Fiji, other senior public officials, several government agencies, development partners, and private sector representatives. Staff from the World Bank also joined some of the discussions. The team would like to thank the Fijian authorities for their hospitality and excellent cooperation.

IMF Communications Department
MEDIA RELATIONS

PRESS OFFICER: Brian Walker

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson


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