The International Monetary Fund has stated Fiji’s fiscal and monetary policies should focus on addressing macroeconomic imbalances.
This is stated in its latest assessment dated June 20 after the conclusion of the Article IV consultation with Fiji.
The IMF states Fiji’s discal policy should focus on lowering public debt while continuing with growth-friendly fiscal consolidation, oriented toward capital spending.
“Significant progress has been achieved in recent years, but additional adjustment measures are needed to put public debt on a clear downward path,” states the IMF.
“Targeted and temporary social protection measures should be used to protect the vulnerable. Fiscal tightening would also contribute to reducing external imbalances.”
IMF adds over the medium term, given potential pressures on the exchange rate peg, monetary conditions should be gradually tightened, raising the policy rate and reducing excess liquidity.
“Financial policy should be attentive to emerging credit risks and to safeguard against money laundering risks.”
“The authorities should avoid using exchange rate restrictions and CFMs (capital flow management measures) in place of macroeconomic adjustment and focus on a gradual, sequenced capital account liberalization to support high long-run growth objectives.”
