COVID-19 Budget: Fiji’s economy to contract by 4.3 per cent – Fiscal update supplement
27 March, 2020, 12:53 pm
The Fijian economy is expected to contract by 4.3 per cent this year after a 0.5 per cent growth in 2019.
This is stated in the economic and fiscal update supplement to the COVID-19 Response Supplementary Appropriation Bill 2020 that was delivered in Parliament last night.
“The economic decline will be much sharper depending on the duration of the pandemic, and the economic impact will be much severe if border closures by key trade partners are prolonged,” the report noted.
“The economy is projected to recover in 2021 and 2022 with a broad-based growth forecast of 1.9 per cent and 3.0 per cent, respectively.”
The supplement states there are several channels through which COVID-19 is expected to affect the domestic economy.
These include a drastic drop in visitor arrivals and tourism earnings, disruptions to global supply chains and subdued trade flows, major slowdown in business activity, potential lay-offs and unemployment as businesses cut costs to stay afloat during these difficult times, reduced remittances inflow, and a devastating blow to Government tax collections.