The 2012 National Budget <http://www.fiji.gov.fj/index.php?option=com_docman&task=cat_view&gid=109&Itemid=158> is designed to adapt to changes in the financial environment on both the international and local stage and cushion the blow of international setbacks such as the Euro-zone crisis.
Ministry of Finance permanent secretary Filimone Waqabaca said one such strategy that provides for this ‘cushioning effect’ was to maintain Fiji’s deficit levels at a low rate.
“At 1.9 percent (deficit) it still gives us a headroom should the crisis hit Fiji then the Government may still be able to lift deficit to 3 per cent which was always our medium term target,” Mr Waqabaca said.
“I would like to say here that when we designed the 2012 budget it was already forward looking, anticipating that should a shock happen,” he said.
“So the 2012 national budget is already placing us strategically to face any shock that should come our way via the Euro crisis.”
The Macro-Economic Policy Committee has a growth forecast of 2.3 per cent but the IMF believes Fiji’s economy will register only 1.5 per cent growth.
“If the slowdown in the Europe trickles to the US and then trickles to Australia and New Zealand which are our main source markets then we may see a likely an impact to our tourism sector,” Mr Waqabaca explained.
In the event that this happens, the measures that Government will take to mitigate the impact is keeping the deficit levels low and at the same time ensure prudent management of Government’s “purse strings”.
Mr Waqabaca said what kind of impact both the recent flash floods and the international financial crisis will have on Fiji could only be ascertained once statistics or figures for the first quarter is finalised.