Sunday, May 26, 2024
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Economy to face challenges as predicted: Prasad

Deputy Prime Minister and Minister for Finance Professor Biman Prasad says Fiji’s economy in the last 18 months has bounced back well after the Government implemented decisive fiscal actions to counter poor fiscal management.

While speaking to FijiLive, Prof Prasad said the Government introduced solutions that would tackle Fiji’s debt problems and introduce several revenue reforms.

Prof Prasad said while these actions may have been painful, they ensured long-term debt sustainability.

He said the Government has managed to bring down our debt-to-GDP ratio from 90 percent in 2022 to below 80 percent by the end of this fiscal year in July.

He said that this is good progress; however, Fiji still has a long way to go – “This path of fiscal discipline and debt reduction must continue.”

“VAT increase has had some impact on prices of goods and services on the Fijian people. But if we do not take this bitter medicine now, the consequences will be far more severe and painful. The recently concluded International Monetary Fund Article IV Mission has also echoed similar sentiments and agreed with the Government’s fiscal consolidation plans and commitment to debt reduction.”

The Ministry of Finance has said while Fiji grew by its usual three percent last year, Fiji still can grow by another two percent.

The Deputy Prime Minister said that five percent per annum is the minimum acceptable growth rate and Fiji needs to stop and look at what our situation is and what measures we need to take to address it.

Prof Prasad also stated that Fiji’s financial sector remains sound and continues to support domestic economic activity. Private sector credit growth is showing encouraging signs but remains below the pre-pandemic trend as over $1 billion in approved loans are yet to be drawn down.

He said that Fiji’s outlook is reasonably positive but we also have short-term and long-term challenges ahead that need careful management.

“The economy is in safe hands. The Government is consultative and takes feedback seriously and acts on it. We are putting our economy and government finances on a more sustainable and firmer footing and we have a long-term vision for Fiji which will be enshrined in the new National Development Plan.”

The government is set to announce the 2024-2025 National Budget on June 28.

Ilaitia Ravuwai
Ilaitia Ravuwai
Journalist | news@fijilive.com

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