Fiji should take pressing motion to scale back a debt burden that exceeds 90 per cent of gross home product or put in danger its restoration from the COVID pandemic and plans for sustainable financial improvement, the World Bank says.
Debt has spiralled since 2019, because the tourism-dependent financial system was hit by border closures towards COVID-19 and tropical storms that lashed the Pacific island nation.
Authorities confirmed spending restraint throughout the pandemic, however the sharp contraction in output drove up public spending as a share of GDP, the financial institution stated in a report on Tuesday.
“Levels of (debt at) around 90 per cent (of GDP) leave the country with limited buffers to address future shocks and highlight the scale and urgency of the fiscal consolidation required,” the financial institution stated.
The remark got here in a press release launched together with the World Bank’s Fiji Public Expenditure Report 2023, sought by the federal government.
“This situation, combined with emerging global economic risks, threatens Fiji’s macro-fiscal stability, an essential foundation for sustainable economic and social development,” the report stated.
Fiji’s authorities says its greatest lenders are the Asian Development Bank and World Bank, although it has excellent loans from Chinese, Japanese and European Union lending establishments.
The World Bank report comes simply as Fiji’s new authorities strives to get it again on a path of fiscal sustainability, stated Finance Minister Biman Prasad, who can also be deputy prime minister.
“The findings … will serve as an important consideration and input in this entire process of fiscal consolidation,” he stated.
Sovereign debt is in focus after a renewed push to beat the logjams adopted a “roundtable” on the current IMF spring conferences in Washington.
That prompted pledges from the Fund and World Bank to share assessments of nations’ troubles extra shortly, present extra low-interest and grant funding and set stricter timeframes on restructurings.
Source: www.perthnow.com.au
