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Positive growth

Ropate Valemei
Friday, February 15, 2013

DOMESTIC economy forecast is expected to expand by 2.7 per cent this year, according to a recent prediction by the central bank.

The Reserve Bank of Fiji said this would be led by the agriculture, manufacturing and the financial intermediation sectors.

In its January Economic Review 2013, RBF said the growth was expected to impact broadly across the economy except the health, social work, public administration and defence sectors.

However, the bank said there would be downside risks to this year's growth after taking into account the repercussions of Tropical Cyclone Evan and a further slowdown on the international front.

Sectoral performances were generally subdued in the final months of 2012, RBF said.

"Weak outcomes were noted for cane and sugar production, visitor arrivals and gold, while electricity generation noted a marginal growth in the review period," the review said.

Visitor arrivals fell by 1.5 per cent in the year to November, while gold production in 2012 fell by 8 per cent on a yearly basis.

In contrast, the review said electricity generated by the Fiji Electricity Authority increased by a marginal 0.1 per cent in 2012.

Electricity production remained largely constrained last year because of a lower demand by consumers and disruptions caused by TC Evan towards the end of last year.

"Consumer spending remained firm as revealed by partial indicators, and was broadly in line with higher household disposable incomes, buoyant consumption lending and personal remittances," RBF said.

"Cumulative to October 2012, domestic Value Added Tax (VAT) collections rose over the year by 16.2 per cent.

"New lending for consumption purposes rose by 25.4 per cent to $246.8 million in 2012 while inward remittances rose annually by 3 per cent during the first 11 months." Looking ahead, the review said consumption activity was expected to strengthen further this year.





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