Discuss warning bells by IMF, says NFP leader

Listen to this article:

Opposition MP Biman Prasad arriving at the parliament complex in Suva. Picture: JOVESA NAISUA
National Federation Party leader Dr Biman Prasad . Picture: FT FILE. JOVESA NAISUA

GOVERNMENT urgently needs to convene a national economic summit after warning signals by the International Momentary Fund (IMF) about future stability and growth of Fiji’s economy, says the National Federation Party leader Professor Biman Prasad.

In a statement issued yesterday, Prof Prasad said the IMF had rightly interpreted that a consumption-driven economy fuelled by reckless public sector spending would not provide lasting economic stability.

“The IMF has also cautioned Government about rising debt that is projected to further increase to over 50 per cent of GDP in a few years. IMF has also projected continued deficit with expenditure outweighing income,” Prof Prasad said.

So naturally, he claimed Government would have to borrow to fund expenditure.

“This is not sustainable.

“Government’s total debt was over $5.1 billion in July 2018. We estimate debt to rise to almost $6.2b in another year. This is a matter of grave concern.

“If one reads the IMF report together with the mid-year fiscal statement provided to Parliament this month for the period August 1, 2018, to 31 January, 2019, the prospects for sustained and real economic growth looks bleak.

“The findings of the IMF are consistent with the low growth in key sectors of the economy like agriculture in the first half of the current financial year.

“For example, only 28.5 per cent of the total budgeted provision for agriculture has been spent in the last six months.

“This is yet another testimony of this Government’s failure to revive agriculture and make it a vital cog in the wheel to drive realistic growth in the economy. Therefore, it is not surprising that Fiji’s import bill for fruits and vegetables averaged $788 million annually in recent years.

“As we have repeatedly stated, Fiji has had a consumption-driven economy in the last eight years, driven by public sector spending.”

Prof Prasad claimed any growth that is consumption-driven will not last and was not sustainable.

“In Fiji’s case, public sector spending is largely based on borrowed funds.

“Furthermore, in the current financial year, it is impossible to meet the budgeted revenue collection target of $4.236b as in the first six months, only 39 per cent of the projected revenue has been collected.

“Given the IMF’s warning bells, especially, Fiji’s inability to recover from a shock of a natural disaster if it happens, we reiterate our call for a national economic summit.

“Government must realise that it alone doesn’t have the solutions to the current and forecasted future problems that will affect the economy. The Opposition stands ready to help Government and we can collectively tackle and overcome the challenges that lie ahead,” he said.

Array
(
    [post_type] => post
    [post_status] => publish
    [orderby] => date
    [order] => DESC
    [update_post_term_cache] => 
    [update_post_meta_cache] => 
    [cache_results] => 
    [category__in] => 1
    [posts_per_page] => 4
    [offset] => 0
    [no_found_rows] => 1
    [date_query] => Array
        (
            [0] => Array
                (
                    [after] => Array
                        (
                            [year] => 2023
                            [month] => 12
                            [day] => 28
                        )

                    [inclusive] => 1
                )

        )

)

No Posts found for specific category