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Pacific-wide growth also to slow

SUVA, Fiji (Fiji Sun, April 1, 2009) – The economic situation in Fiji is expected to worsen, warns the Asian Development Bank.

ADB economist Greig Sugeen speaking from Australia yesterday on the launch of their flagship annual economic publication, Asian Development Outlook 2009 (ADO 2009) of economist, said that Fiji’s economy was in a worrying state.

"Fiji is a country of major concern. The political destabilisation has caused businesses to think twice about investing in Fiji and its foreign reserves is way below the target line due to economic contraction, decline in remittances and other issue," Mr Sugeen said.

According to the report, economic growth in the Pacific will slow to 3 per cent, down from a record 5.1 per cent in 2008.

It says the region will continue to grow overall in 2009 because of expansion in the large, resource rich nations.

"There is no doubt the global economic crisis is impacting adversely on the Pacific economies, and the region has not yet felt the full force of these impacts," ADB’s Director General of Pacific Department Hafeez Rahman said.

A contraction is expected in Fiji as tourism and remittances weaken.

"The Pacific can take action towards recovery from the crisis," Mr. Rahman said.

"The best option is to adopt a short term fiscal stimulus, where affordable and offering good value for money, by increasing government expenditure or possibly by reducing taxes. Care is nonetheless needed to avoid budget blow-outs," he said.

In Fiji, the economy recovered in 2008 to grow at 1.2 per cent, helped by an increase in visitor arrival.


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