Fiji has high debt vulnerabilities and its high dependence on tourism is a risk, says the World Bank in its latest East Asia and Pacific Economic Update.
The World Bank said the assessment was done in April as part of its debt sustainability analysis where it found Fiji had high debt vulnerabilities with public debt being sustainable with fiscal consolidation.
“Prior to the COVID-19 pandemic, Fiji had a poverty rate of 24.1 per cent in 2019/2020 as defined by the national standards of living,” the World Bank said.
“Real GDP contracted by 17.2 per cent in 2020 and 4.1 per cent in 2021, disrupting fiscal policy and amplifying pre-pandemic fiscal vulnerabilities that led to a spike in public debt.”
The World Bank said Fiji’s adoption of the WHO (World Health Organisation) best-practice standards and protocols, and its high COVID-19 vaccination rate resulted in the reopening of international borders in December 2021, which stimulated economic recovery.
“High dependence on tourism is a risk to sustained recovery and highlights the need for diversified sources of growth. Fuel, food, and fertiliser prices, comprising around 40 per cent of imports, have increased due to the Ukraine war.”
High inflation affected domestic business and consumption, slowed economic recovery, lowered real income, and arrested poverty reduction Questions sent to the former attorney-general and economy minister Aiyaz Sayed-Khaiyum since October have not been answered.