Transcribed
Fiji : Visitors arrivals, Inflation
3.32.3 Visitor arrivals, Fiji Australia New Zealand Others Thousand visitors 750_ 500_ 250_ 0_ 2008 2009 2010 2011 2012 Sources: Reserve Bank of Fiji; ADB estimates. 3.32.4 Inflation Food Utilities All groups Transport 15_ - 45 10_ - 30 5_ - 15 0_ -5- --15 2009 2010 2011 2012 2013 2014 Forecast Sources: Fiji Bureau of Statistics; ADB estimates.
Fiji : Visitors arrivals, Inflation
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Tourist arrivals declined by
2.1% relative to 2011, at least in part because of successive floods early in
the year, with arrivals from Australia being down modestly (Figure 3.32.3).
In December, f...
light cancellations caused by the cyclone drove down
departures to Fiji that month from Australia and New Zealand—the two
main markets—by 11% and 16%, respectively, year on year. Given these
late developments, the official 2012 GDP growth estimate is likely to
be revised downward, particularly when flow-through effects on other
sectors are fully taken into account
In 2012, inflation ran at 4.3%—less than half of the rate in 2011
(Figure 3.32.4). Floods in January and March disrupted the supply of
locally produced fruits and vegetables, fueling higher inflation early in
the year. Inflation then fell gradually as commodity prices stabilized.
Fiji’s net budget deficit in 2012, excluding principal repayments on
loans, was estimated to be equivalent to 1.6% of GDP. This was larger than
the 1.4% of GDP recorded in the previous year, but on-target expenditure
and unexpectedly high revenue collections—particularly corporate
taxes following the adoption of an advance tax payment system for
companies—brought the deficit down to below the target of 1.9% of GDP.
The central bank maintained an expansionary monetary policy,
keeping its overnight policy rate at 0.5%, which it has maintained
since October 2011. This contributed to low interest rates on loans and
time deposits at commercial banks and kept liquidity high. In 2012,
commercial banks’ outstanding loans increased by 7.6% year on year.
The central bank also loosened exchange rate controls in response to
rising foreign reserves. Nonetheless, at the end of 2012, foreign reserves
totaled $922 million, sufficient to cover 5.2 months of imports, up from
5.0 months in December 2011.
The 2013 budget reports Fiji’s current account deficit as narrowing
to 6.1% of GDP in 2012 from 7.0% in 2011. However, the actual current
account deficit may widen because of a higher trade deficit late in the year
reflecting lower sugar and gold export earnings, as well as lower tourism
receipts. Merchandise exports, including re-exports, grew by only 5.1%,
far short of the forecast 12.3%. Import growth estimates for 2012 have been
revised upward to 5.4% from 4.7%.
Sources: Fiji Bureau of Statistics; ADB estimate ( http://www.statsfiji.gov.fj/) ,
Reserve Bank of Fiji; ADB estimate
Source
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