MOODY'S Investor Services has given Fiji a negative outlook but said the country's strengths lay in its "very low external debt and service ratio" and good tourism projects.
Its rating, which was released early August predicted the GDP to grow by 1.5 per cent and the inflation to be 5 per cent at the end of the year.
Moody's outlook also stated that one of Fiji's strengths was its captive source of government financing.
It listed Fiji's credit challenges as the continuing restructuring of the declining sugar industry, weak economic growth prospects, ethnic and political divisions that "adversely affected investment climate" and moderately high government debt levels.
The Reserve Bank of Fiji revised its GDP growth forecast upwards in June this year from 2.3 per cent to 2.7 per cent.
Announcing this revised growth projection, governor Barry Whiteside said it incorporated the impact of the 2012 National Budget policies, the recent floods, revised outlook for the global economy and our major trading partner economies, as well as recent developments in the domestic economy.
And despite the floods earlier in the year, which was expected to affect the economy, Mr Whiteside said the impact was expected to be largely limited to the agriculture (including cane and non-cane crops) and sugar manufacturing industries.
The downward revisions in output of these sectors were expected to be more than offset by improved projections for other sectors.
These sectors included other manufacturing (particularly, non-food), forestry which was forecast to gain from pine-chipping operations at Wairiki this year, fishing which faced higher demand for tuna for sashimi, canning, loin and other commercial fishing categories, mining and quarrying.
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