Fiji's economic growth expected to rebound by 11.3 pct in 2022

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SUVA, Dec. 8 (Xinhua) -- Fiji's economic growth is expected to rebound by 11.3 percent in 2022 following a re-estimated 15.2-percent contraction in 2020 and a 4.1-percent decline in 2021, Fiji's central bank said on Wednesday.

The Reserve Bank of Fiji (RBF), Fiji's central bank, said that according to the recent assessment by Fiji's Macroeconomic Committee, a recovery in 2022 will be primarily supported by the recommencement of international tourism and its positive spill-over effects on other sectors of the economy.

It said the main sectors contributing to the expected rebound are accommodation and food services, transport and storage, finance and insurance, wholesale and retail trade, and manufacturing and agriculture. The broad-based economic recovery is envisaged to continue into 2023 and 2024, with the economy forecast to expand by 8.5 percent and 7.7 percent, respectively.

This compares with the earlier forecast in July this year, which expected the Fijian economy would rebound by 6.2 percent in 2022 and by 8.0 percent in 2023.

The higher revised gross domestic product growth forecast for 2022 is based on forward bookings and consultation with the tourism industry and the national airline.

Fiji saw an earlier reopening of borders from December this year, with visitor arrivals expected to reach 50 percent of 2019 levels against the earlier assumption of borders reopening in mid-2022 with only 30 percent of 2019 arrivals. Visitor arrivals are forecast to rise further to 85 percent of 2019 levels in 2023 and return to pre-pandemic levels by 2024.

Fiji's central bank said that despite the growing optimism, there are downside risks to the outlook. The vaccine inequity across the globe, with pockets of vaccine hesitancy, could lead to new variants that are more potent and highly transmissible, resulting in renewed lockdowns and other mobility restrictions globally, thereby dampening tourism demand.

Therefore, a slower-than-anticipated travel appetite, the wait-and-see approach by investors in light of Fiji's upcoming 2022 general elections, and the ongoing threats from natural disasters and climate change can easily stifle economic recovery going forward. On the upside, "lockdown fatigue" across the globe could flare up travel appetite, resulting in a stronger economic recovery, according to the bank.

According to the RBF, the last two years have been extremely challenging for the Fijian economy. While current labor market conditions and broader economic activity are still below pre-pandemic levels, recent indicators suggest that the COVID-19-induced economic recession has started to bottom out.

Fiji's ability to rapidly fully vaccinate over 90 percent of its adult population has enabled the Fijian government to gradually ease COVID-19 restrictions and ultimately reopen borders for international travel from Dec. 1 this year, helping create a wave of optimism across the country, according to the bank. Enditem

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