THE global siren for preparation is now live, said Fijian economist and regular Fiji Times columnist Dr Sushil Sharma as worst case scenarios of the impact of the war in the Middle East on economies begin to emerge across the world. “On April 14, 2026, International Monetary Fund chief economist Pierre-Olivier Gourinchas released the World Economic Outlook in Washington and warned that a prolonged Middle East conflict could push global growth below two per cent — a ‘close call for global recession’, reached only four times since 1980,” Dr Sharma wrote in his latest Op-Ed (see Page 14).
“Minutes after publication he added that the adverse scenario ‘looks increasingly likely’.
“The day before in Suva, the ADB confirmed Fiji’s GDP growth would moderate to 2.9 per cent in 2026 and 2.7 per cent in 2027, with higher fuel prices, shipping disruptions and financial volatility the principal risks.
“And on April 13, Reserve Bank of Fiji Governor Ariff Ali had been direct at the ADB launch: even if the war ended tomorrow, Fiji would contract by 0.5 to one per cent; beyond six months, ‘we may not have growth this year unless a miracle happens’. Three institutions, three frameworks, one converging conclusion. The business community’s window for deliberate preparation is narrowing.”
Issuing what he calls a “national economic advisory and warning”, Dr Sharma said Fiji must take into serious consideration Mr Ali’s three case scenarios for Fiji.
At the ADB ADO launch, Mr Ali had outlined Fiji’s three case scenarios, which he later clarified to this newspaper were:
1. If the war/crisis ends today. Growth will be lower by around 0.5 to 1.0 per cent. That means GDP growth will around 2.0 to 2.5 per cent.
2. If the war drags for three more months. Growth be half or slightly lower or around 1.00 per cent.
3. If the war drags beyond six months. GDP will be minus, ie: the economy will contract (unless a miracle happens).
“If the war drags on, a recession is possible,” Mr Ali told this newspaper.”
Said Dr Sharma: “What the Governor’s warning means in plain terms is this: higher prices, fewer jobs, tighter bank lending and a government with shrinking revenue to fund health, infrastructure and education precisely when pressure on each is rising.”
His advice to Fijian businesses:
Under Scenario One, the priority is cash flow discipline: review debt servicing, consolidate supplier contracts, identify deferrable expenditure.
Under Scenario Two, labour strategy is critical: reduced hours and multi-skilling preserve the trained workforce that recovery will urgently require.
Under Scenario Three, activate buffer stock protocols, consolidate Pacific freight lanes and engage commercial banks before credit conditions tighten.
“Business Fiji, Investment Fiji and the Fiji Commerce and Employers’ Federation have a coordinating duty that has rarely been more urgent,” he wrote.
