CENTRAL BANK WANTS FIJI GOVERNMENT TO BOOST SAVINGS

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SUVA, Fiji Islands (May 5, 1999 - PACNEWS/Fiji Times)---Fiji’s central bank has advised the government to boost savings and investments to increase economic growth.

The Fiji Times reports the Reserve Bank of Fiji (RBF) specifically wants the government to boost savings by reducing the size of the fiscal deficit, projected to be at 5.6 percent of Gross Domestic Product (GDP) this year.

"Within this constraint, the government can also boost investments by redirecting some of its existing spending away from operating expenditures and toward capital expenditures," reported the RBF in a monetary policy statement.

The RBF warned that the biggest risk to the Fiji economy at this stage -- both to economic growth and inflation -- continued to be the low levels of savings and investments.

According to the statement, the levels of savings and investments are both approximately 12 percent of the GDP, about half of the international standards for developing countries.

"Low levels of savings and investments cause slower economic growth and increase the exposure of the economy to domestic and external shocks," said Sada Reddy, RBF’s Deputy Governor.

The RBF statement also reports that the Fiji economy had now moved out of a recession and is expected to grow by 7.4 percent this year.

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