The Fijian economy is anticipated to be significantly impacted by the global COVID-19 pandemic.
And the Reserve Bank of Fiji says the local economy is forecast to contract sharply by 21.7 per cent this year, with major hits to the tourism industry and related sectors.
According to the RBF economic review for July 2020, the anticipated recovery in 2021 and 2022 is contingent on the early containment of the pandemic and the resumption of global tourism
activity.
“Additionally, the $2.0billion Government stimulus package announced in the 2020-21 National
Budget is expected to provide further support,” the RBF stated.
It stated that the latest indicators suggested persistent weakening in major sectors of the economy relative to a year ago.
It said the services sector continued to contract depicted by a sharp fall in visitor arrivals (-65.3 per cent) cumulative to June.
Over the same period, pine wood supply (-20.1 per cent), woodchip (-1.5 per cent), sawn timber (-39.8 per cent), mahogany (-36.4 per cent), gold (-7.4 per cent) and electricity (-8.4 per cent) production declined, which it attributed to subdued demand and halt in production and supply.
The RBF said that over the month, production for mahogany, sawn timber, and woodchips rose suggesting some recovery from the lows of March.
“On a positive note, cane and sugar production grew by 29.9 per cent and 13.6 per cent, respectively, in the first six weeks of crushing, attributed to increased operating efficiency and lower mill breakdowns compared to last year.
Global activity, on the other hand, continued to be impeded by containment measures to the COVID-19 pandemic, which had now infected more than 17.0million people worldwide, the RBF report noted.
It stated that according to various international agencies, this year, the “world economy will shrink at the sharpest rate in decades, as measures taken to contain the pandemic have severely restrained private consumption, investment, trade and travel”.
“On a positive note, the COVID-19 vaccine is now in Phase 3 of testing and several countries have started to slowly lift lockdown restrictions,” the central bank reported.
“Overall, according to the IMF, the world economy is expected to rebound by 5.4 per cent in 2021, following a 4.9 per cent contraction this year.”
