Republic of Fiji: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Fiji

IMF Staff Country Reports, March 25, 2020

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Canonical URL: Republic of Fiji: 2019 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for the Republic of Fiji

Economic activity slowed sharply in 2019 due to lower government spending, tighter domestic financial conditions, weak sentiment, and the global deceleration.
The 2019 slowdown followed several years of relatively strong growth, boosted by reconstruction spending after a major cyclone in 2016, which resulted in rising external and fiscal imbalances.
Fiscal space is now at risk and external vulnerabilities remain significant.
Fiji has large investment needs to strengthen resilience to natural disasters and climate change.
A key priority should be to rebuild fiscal buffers in a growth-friendly way to create space to respond to future natural disasters and to ensure public debt sustainability.
Fiscal consolidation should focus on reining in current spending given limited scope for further revenue mobilization and the need for capital spending to improve resilience to climate change.
Improvements in the business environment and in governance are essential to raise potential growth and boost private investment, and to enhance productivity and competitiveness.

Rising external and fiscal imbalances following reconstruction spending after the 2016 cyclone.
Significant external vulnerabilities and limited fiscal space to respond to future shocks.
Large investment requirements to strengthen resilience to natural disasters and climate change, creating a trade-off with fiscal consolidation.

Rebuild fiscal buffers in a growth-friendly manner to ensure public debt sustainability and to create fiscal space for future natural disasters.
Prioritize fiscal consolidation through reining in current spending.
Preserve scope for capital spending aimed at improving resilience to climate change despite the need for consolidation.
Implement improvements in the business environment and governance to raise potential growth, boost private investment, and enhance productivity and competitiveness.