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ADB launches report on progress

Geraldine Panapasa
Tuesday, December 11, 2012

FIJI is expected to achieve narrower deficit than budgeted because of its adoption of an advanced payment system for company taxes.

However, measures like rising commitments to expenditure on capital works and the national airline's purchase of a new aircraft raised concerns about the country's rising debt levels.

This was revealed at the launch of the Asia Development Bank's Pacific Economic Monitor: December 2012 issue at the University of the South Pacific's ICT Park in Suva yesterday.

"The improved fiscal performance in several smaller Pacific economies is encouraging particularly in the context of a weaker global economy," said Xianbin Yao, director general of ADB's Pacific department in a statement.

"The weakening in the fiscal performance of larger resource exporting Pacific economies, which are showing ill-effects from the weaker global economy, highlights the need for all Pacific economies to continue to work to improve their fiscal management and public service delivery while investing in vital infrastructure to enhance their long-term economic prospects."

Ministry of Finance permanent secretary Filimoni Waqabaca clarified some data in the report, particularly estimates relating to Fiji's capital and operating expenditures.

While the Monitor noted a ratio of 80:20 per cent for operating expenditures against capital expenditures, Mr Waqabaca said the correct ratio should have read 71:29 per cent for last year and this year.

"Our figures for the fiscal deficit position is different from the ones they (ADB presented) and the outcomes we have. For 2012, we are targeting 1.6 per cent deficit. At the end of October, our deficit forecast was 1.6 per cent. The final outcome was 0.6 per cent positive," he said.

"The Monitor raised a lot of positive things about Fiji, basically saying they noticed the growth we are now experiencing — a 2.5 per cent growth.

"They also witnessed a change in our capital expenditure against our operating expenditure.

"Our operating expenditure used to be higher at 80 per cent while our capital expenditure was lower at 20 per cent.

"Now they've seen a big change for 2013 where our operating expenditure will be 68 per cent and capital expenditure at 32 per cent."