Top policy priority
10 June, 2023, 2:30 pm
ANZ International Economist Dr Kishti Sen predicts that the solution to Fiji’s debt issues lies in the empowerment of the private sector.
ANZ Research believes that the reduction of red-tape and regulation in order to attract business investment should be the top policy priority for the upcoming national budget.
“The good news is that Fiji has an impressive investment pipeline which needs to go to commencement,” Dr Sen said.
“There’s progress. Businesses may be waiting to see what’s in the budget before they move on some of their projects.
“Anything the government does to get the existing project pipeline started will be welcomed.
“We want business investment to pick up sufficiently, so it becomes a primary creator of jobs and driver of economic growth.
“ANZ Research believes bottleneck issues, including workforce capability gaps and excessive bureaucracy, should be prioritised and addressed in the budget.
“A budget that prioritises growth and expansion may concern those that believe it should instead focus on reducing deficits and curbing debt levels.”
A deficit budget will add to debt but ANZ Research is, reportedly, “not concerned about government’s ability to service its debt levels.
“Interest payments as a proportion of revenue are below historical peaks.
“So, all the debt metrics will take care of themselves if we unleash private sector participation in the economy.
“If you look at the economic performance, we are almost back to pre-pandemic levels.
“Inbound demand is being turbo-charged by Fiji’s world class and unique product offerings and there’s still significant pent-up global travel demand.
“So, the economy is thriving. Certainly, Fiji’s buoyant economy supports smaller budget deficits.”
ANZ Research expects the government will find that it is in a much better revenue position than anticipated, due to the strong employment growth and lift in economic activity.