ANZ PACIFIC ECONOMIC OUTLOOK: FIJI, SOME LIGHT AT THE END OF THE TUNNEL:
ANZ’s latest Pacific Economic Outlook reports that Optimism is rising on the back of good news on vaccines:
- Fiji’s economy was decimated by closed borders and the subsequent collapse of the dominant international tourism industry last year. We estimate GDP fell by 16.8% in 2020.
- However, COVID-19 containment measures have been highly successful, with Fiji going 350 consecutive days without a case in the community. And with vaccinations under way, we think there is good chance that international borders could open before the end of this year.
- With the return of international tourists and support from the non-tourism economy such as construction, agriculture and service sectors which is underwritten by remittances and government spending, we think GDP can rebound partially this year by 4.9%.
- Further, we believe activity can return to pre-COVID levels in 2022 when international tourism once again becomes the key driver of growth. A 15.4% lift in GDP is forecast for 2022.
- Foreign currency flows are more or less in balance, yielding a comfortable buffer of foreign reserves which in turn is providing good support to the currency peg. This is quite remarkable, given the substantial reduction in tourism receipts last year. We expect foreign reserves to retain a sufficient buffer, meaning the official FJD/USD rate will continue to be influenced by the ebbs and flows of the AUD and NZD. We are forecasting the FJD/USD to push above US0.50 on the back of stronger key trading partner currencies.
- Risks to the outlook are balanced. There is a risk that vaccine supply is limited and international borders don’t open this year. If this eventuates, we won’t have a bounce in GDP. On the upside, if a safe travel corridor can be established, then the recovery in tourism could come through faster than we have forecast.
2021 WATER AND WASTEWATER OPPORTUNITIES IN FIJI AND THE PACIFIC:
Austrade invites you to participate in a webinar on 2021 Water and Wastewater Opportunities in Fiji and the Pacific on 21 April 2021 at 0900. The webinar will profile water and wastewater opportunities in Fiji and the Pacific and is targeted at Australian business in the water and wastewater sector, already active in the Pacific or considering entering Pacific markets. For Fiji and many other Pacific countries, access to clean and reliable water is a key priority. With high urban and peri-urban growth and an explosion of informal settlements, existing and ageing infrastructure is struggling to meet growing demand. More information including registration details here.
FIJI COVID REPORT:
At 31 March 2021, one active case remains admitted at the Lautoka hospital isolation unit. It has been 14 days since the last border quarantine case was reported, and 347 days since the last case was detected outside border quarantine on April 18th 2020. Fiji has had 67 cases in total, with 64 recoveries and 2 deaths, since our first case was reported on March 19th 2020. The last 49 cases have been international travel associated cases detected in border quarantine. There are currently 1,002 people who have recently arrived from overseas undergoing mandatory 14-day quarantine in government supervised border quarantine facilities.
FIJI WELCOMES LARGEST-EVER PRIVATE SECTOR INVESTMENT FROM JAPAN:
On 26 March 2021 the Fijian Government announced it has entered into an agreement under which a consortium, namely Sevens Pacific Pte Limited, owned by Chugoku Electric Power Company (“CEPCO”) and the Japan Bank for International Cooperation (“JBIC”) will acquire a 44% shareholding in Energy Fiji Limited (“EFL”). Read more.