A world renowned ratings company expects the Fijian economy to grow strongly.
This has been the findings of ratings company- Standard and Poors (S&P), one of the Big Three credit-rating agencies, which also include Moody’s Investors Service and Fitch Ratings which regularly releases ratings of nations worldwide.
These ratings are an indication of how a country fares in terms of credit ratings. Fiji has received B+ stable rating.
Their overview states: “We expect Fiji’s economy will continue to grow strongly, supporting the rating growth will help stabilise debt levels as a proportion of GDP following Tropical Cyclone Winston in 2016. Fiji’s falling interest costs, sound external performance, and medium-term economic growth prospects support the ratings.
“We are affirming the B+ long-term and B short-term sovereign credit ratings on Fiji. The stable outlook reflects our expectation that the economy will continue to grow despite the impact from the cyclone, although the Government’s budget remains in deficit.
“We expect Fiji’s economic expansion- in its ninth year- to continue at about 3.5 per cent per year between 2018 and 2021, driven by tourism spending and investment, higher levels of consumption, and public investments.
“Per capita GDP is growing about three per cent per year, and we estimate GDP per capita in 2018 at US$6,200 – up by 25 per cent since 2015.”
The report further notes that the ratings support may improve after the elections if policy stability boosts growth prospects.
“In the past few years, Fiji has been politically stable and relations with the international community, including donor agencies such as the Asian Development Bank and the World Bank, have strengthened. During this period, GDP growth remained steady, with the exception of 2016, due to the cyclone.”
Fiji’s reliance on its tourism industry makes it vulnerable and there is a need to loosen foreign exchange restrictions.
“Nevertheless, the country remains vulnerable to shifts in tourism preferences and natural disasters. In 2017, the economy rebounded, growing more than four per cent after Cyclone Winston caused major damages and disruptions in February 2016.
“We affirmed our rating on Fiji to reflect our view of the country’s weak institutional settings, limited monetary policy flexibility, income levels, government’s falling interest costs, stabilizing debt levels, and its sound external position.”