Re-energise export drive Narube
Wednesday September 05, 2007

Fiji needs to re-energise its export drive and stimulate the economy through increasing exports rather then reducing imports says Reserve Bank of Fiji Governor Sevenaca Narube.

Narube made this comment during the opening of the Westpac Branch in Port Denarau in Nadi yesterday.

He said while it was encouraging seeing imports declining and foreign reserves stabilising "and even rising lately, we are not out of the woods yet, far from it".

"While exports have increased by 7 percent in the first six months of the year, this was mainly from seasonality in the receipts of sugar export proceeds," Narube said.

"We are still expecting exports to decline in 2007.

"We should therefore re-energise our export drive.

"It is always far superior to drive the economy through exports rather than what we are doing now in pulling back import demand in order to protect our balance of payments."

Narube said with the reduction in lending rates, he expects the high liquidity to remain for some time.

"The lower interest rates should support the restoration of economic growth," he said.

"We expect the economy to grow by around 2 percent next year on the back of growth in the tourism industry."

However, Narube said his growth projection does not include any mining of gold and another major risk to this projection "is the delay in the restructuring of the sugar industry".

The future of gold mining and the sugar industry, once strong export sectors, have been in a state of limbo with the closure of the gold mines and a halt in the sugar restructure programme due to money woes.

Narube said the recent revised economic projections anticipate a "larger economic decline of 3.1 percent this year compared to 2.5 percent expected earlier".

"All economic indicators support this new forecast and there are some downside risks to this forecast," he said.

"These include lower than expected tourist arrivals. What happens to tourism industry has considerable flow on effect to the wholesale & retail trade; hotels & restaurants; and transport & communication sectors.

"The other risks to this projection are the possible rise in oil prices and of course the weather."

However, Narube said he thinks that it is "very unlikely" that the economic contraction "will be worse" than what the RBF have announced.