Earlier economy forecast more realistic: Economist

The 2.7 percent economic growth forecast by the Prime Minister in his 2013 Budget address is more realistic says economist, Professor Biman Prasad.

He made the comment in response to an announcement by the Reserve Bank of Fiji to revise the economic growth forecast to 3.2 percent – the highest since 2004.

“I think the Prime Minister’s forecast in his 2013 budget, in my view, remains realistic. Given what’s happenning in the real sector, in the sugar industry, the agricultural sector and the manufacturing sector – and given the quality of investments we might have had in the last 18 months, it’s too optimistic and too early to announce a revised growth forecast of 3.2 percent."

The economic growth projection has been revised because of growing optimism in the economy.

In a statement earlier this month, the RBF said the growth is projected to be broad-based with positive contributions from all the sectors except for the mining and quarry sector.

The manufacturing: agriculture, wholesale & retail trade: communication;financial intermediation: construction and the transport & stowage sectors provide the major impetus to the 3.2 per cent growth in 2013.

However, Professor Prasad said the country’s two main export sectors-sugar and tourism did not perform well in the first quarter.

“We need to look at the performances in the real sector like agriculture, sugar and what’s happened in the tourism sector. I think we will have to wait until we really assess what has happened in the second quarter and possibly, what will happen in the third quarter.”

The RBF said strong growth has been recorded in various partial indicators, such as tax collections, remittances, domestic cement sales, and borrowing by the private sector for consumption and investment.

An International Monetary Fund team to Fiji has projected a 3 per cent economic growth for Fiji in 2013 which is slightly less than the Reserve Bank of Fiji’s projection of 3.2 per cent.

The IMF team led by Chikahisa Sumi said the difference was negligible.
However, he said there are some areas of concern that would need to be addressed if Fiji wants to meet its medium term goal of five (5) per cent growth such as investor confidence, increased resilience to both domestic and international shocks and reducing the 8.6 per cent unemployment rate.

“To achieve higher growth and reduce unemployment, faster and deeper structural reform is now urgently needed,” Sumi said.

He said these issues would need to be ironed out before Fiji can progress in a manner it is capable of.   -- Ritika Pratap, FBC News 19/8/13,

Comments

Anonymous said…
I was at the fiji update seminar and I heard from sources that prof Biman was told off in the presence of others for quoting very misleading data, unbecoming of a prof for his own personal agenda. This source said that his actions recently has resulted him from being demoted from the Dean position to a much lower position. He did not even get the head of Economics. Maybe, he will stand for NFP post.

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