STABILISING the disrupted global supply chain is expected to take months, or even up to a year, as ongoing global uncertainties continue to impact fuel demand and production.
Former deputy prime minister and finance minister Professor Biman Prasad said restoring production and supply levels would not be immediate, warning that prolonged recovery periods were typical during major global disruptions.
“To get the production, the supply back on track is going to take a long time,” Prof Prasad said.
“In economics we say bad times last long. So to restore the supply it will take time, six months, even a year, depending on what happens.”
He explained that global demand for energy and fuel remained high and were likely to increase further as the crisis unfolds, regardless of whether conditions improve or persist.
“There will be cases where countries will try and build up their own reserves. Fuel companies will look at the cost, the price.
“So the demand for energy is already high and is going to become higher as the crisis unfolds.”
Prof Prasad also addressed Fiji’s fiscal position, acknowledging earlier concerns raised by the International Monetary Fund (IMF) regarding limited fiscal space when the current government took office.
He said steps taken over the past three years had strengthened the country’s financial standing, including reducing the debt-to-GDP ratio from around 90 percent to approximately 77–78 percent.
Prof Prasad also said improvements in GDP growth and government revenue had created some fiscal capacity to respond to challenges emerging from the COVID-19 pandemic and its aftermath.
“And so the economic fundamentals of the country is very strong. Until the end of last year, until we are seeing this crisis.”
