Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1697733700458.pdf (Fiji)
REPUBLIC OF FIJI ECONOMIC AND FISCAL UPDATE SUPPLEMENT TO THE COVID-19 RESPONSE BUDGET ADDRESS Ministry of Economy 26 March 2020 FOREWORD This Economic and Fiscal Update provides an analysis of the impact of the COVID-19 pandemic on the Fijian economy and government finances.

It also discusses the Government’s response, comprising a suite of policy measures designed to prop up Fijian businesses and sustain jobs and incomes.
This document is a “Supplement to the COVID-19 Response Budget Address” and was compiled by the Ministry of Economy in conjunction with the Fiji Revenue and Customs Service, and the Reserve Bank of Fiji.

It incorporates economic and fiscal information as of March 2020.
Makereta Konrote Permanent Secretary for Economy 26 March 2020 2 TABLE OF CONTENTS 1.0 INTRODUCTION ................................................................................................... 4 2.0 BACKGROUND ON COVID-19 ............................................................................ 4 3.0 IMPACT OF COVID-19 ON THE FIJIAN ECONOMY ....................................... 5 DISRUPTIONS TO TOURISM ACTIVITY .................................................................................. 5 DISRUPTIONS TO DOMESTIC BUSINESS ACTIVITY ................................................................ 6 DISRUPTIONS TO TRADE FLOWS .......................................................................................... 7 FISCAL IMPLICATIONS ......................................................................................................... 9 4.0 GOVERNMENT RESPONSE TO COVID-19 ....................................................... 9 BORDER PROTECTION MEASURES ....................................................................................... 9 FISCAL MEASURES .............................................................................................................. 9 MONETARY POLICY .......................................................................................................... 12 2019-2020 REVISED FISCAL PROJECTIONS ....................................................................... 12 GOVERNMENT DEBT AND FINANCING .............................................................................. 16 5.0 FISCAL OUTLOOK WITH COVID-19 .............................................................. 19 APPENDICES ................................................................................................................ 20 TABLE 1: REVENUE POLICY .............................................................................................. 20 Part 1 – Direct Tax Measures ...................................................................................... 20 Part 2: Indirect Tax Measures ..................................................................................... 23 TABLE 2: GROSS DOMESTIC PRODUCT BY SECTOR 2015-2022 ($M) ................................ 27 TABLE 3: GDP GROWTH BY SECTOR 2015–2022 (% CHANGE) ........................................ 29 TABLE 4: NOMINAL GDP ($M AND %) ............................................................................. 30 TABLE 5: FISCAL YEAR NOMINAL GDP ($M AND %) ....................................................... 30 TABLE 6: TOTAL EXPORTS BY MAJOR COMMODITIES 2015–2022 ($M) ........................... 30 TABLE 7: FISCAL YEAR EXPORTS 2015-2022 ($M) .......................................................... 31 TABLE 8: TOTAL IMPORTS BY CATEGORY 2015–2022 ($M) ............................................. 31 TABLE 9: FISCAL YEAR IMPORTS 2015-2022 ($M) ........................................................... 31 TABLE 10: BALANCE OF PAYMENTS 2015-2022 ($M) ...................................................... 32 TABLE 11: TOURISM STATISTICS 2015–2022.................................................................... 33 TABLE 12: SUGAR PRODUCTION, EXPORT AND PRICE 2015–2022 .................................... 33 TABLE 13: INFLATION RATES 2015–2020 ......................................................................... 33 TABLE 14: EMPLOYMENT BY SECTOR 2010–2017 (IN THOUSANDS OF PERSONS) .............. 34 3 1.0 1.1 1.2 2.0 2.1 2.2 2.3 INTRODUCTION The novel coronavirus (COVID-19) pandemic presents not only a public health crisis for Fiji, but also an economic crisis of unprecedented scale.
The implications of COVID-19 on the Fijian economy are enormous, particularly its devastating effects on the tourism industry, severe disruptions to trade flows, major slowdown in business activities and its drastic impact on public finances.

In response, the Fijian Government is allocating substantial resources for containment and treatment of the virus and also providing the necessary fiscal support to minimise economic disruptions.
This includes targeted spending and fiscal measures to boost disposable incomes, assist business cash flows, protect employment and sustain livelihoods of those adversely affected by the crisis.

BACKGROUND ON COVID-19 COVID-19 originated in Wuhan, China in December 2019, quickly intensifying throughout Asia and Europe, before eventually spreading to the rest of the world.

At the moment, there are close to 400,000 confirmed cases in more than 190 countries, with over 16,000 confirmed deaths.
On 11 March 2020, the World Health Organization (WHO) declared COVID-19 a pandemic, pointing to the rapidly escalating number of cases and the sustained risk of further global spread.

In response, several countries have closed off their borders, banned or restricted international travel, cancelled mass gatherings, and in many cases also implemented city, regional, or country-wide movement restrictions.
Fiji recorded its first confirmed case of COVID-19 on 19 March 2020 which has increased to five positive cases as of 25 March 2020.

A number of measures are in place with all passenger flights to and from Fiji being suspended, movement restricted in and out of the affected area and limitation placed on non-essential gatherings.

Apart from this, other measures were also put in place to ensure the safety and wellbeing of Fijians.
4 3.0 3.1 3.2 IMPACT OF COVID-19 ON THE FIJIAN ECONOMY Aside from the severe ramifications for public health and safety, COVID-19 poses an unparalleled threat to Fiji’s domestic economy.
There are several channels through which COVID-19 is expected to affect the domestic economy, including a drastic drop in visitor arrivals and tourism earnings, disruptions to global supply chains & subdued trade flows, major slowdown in business activity, potential layoffs and unemployment as businesses cut costs to stay afloat during these difficult times, reduced remittances inflow, and a devastating blow to Government tax collections.
The Fijian economy is expected to contract by 4.3 percent in 2020 after a 0.5 percent growth in 2019.

The economic decline will be much sharper depending on the duration of the pandemic and the economic impact will be much severe if border closures by key trade partners are prolonged.

The economy is projected to recover in 2021 and 2022 with a broad based growth forecast of 1.9 percent and 3.0 percent, respectively.

Real GDP growth from 2009 to 2022 is given in Figure 1 below.
Figure 1: Real GDP Growth 5.6 4.7 4.7 5.4 3.0 2.7 1.4 3.5 2.5 3.0 1.9 0.5 -4.3 Percent 5.0 3.0 1.0 -1.0 -3.0 -5.0 -1.4 2009 2010 2011 2012 2013 2014 2015 2016(r) 2017(r) 2018(p) 2019(f) 2020(f) 2021(f) 2022(f) Sources: Fiji Bureau of Statistics and Reserve Bank of Fiji Disruptions to tourism activity 3.3 A massive decline in visitor arrivals and tourism earnings is expected for 2020.
If the pandemic is not contained and border closures continue into the second half of the year, the decline in both 5 3.4 3.5 visitor arrivals and tourism earnings will be even larger with the potential of a double digit contraction in the Fijian economy.

Further developments on this front will be closely monitored and adequately reflected in future revisions to the macroeconomic forecasts.
The closure of Fiji’s borders to COVID-19 “hot spots” and travel restrictions imposed by our major source markets will significantly affect visitor arrivals and tourism earnings in 2020.

Disruptions to our source markets like Australia, New Zealand and USA which account for 75 percent of total visitor arrivals will create a sizeable downturn as the industry accounts for over a third of Fiji’s economy.
This will result in lower revenues not only for Fiji Airways and the tourism sectors, but also other tourism-dependent businesses such as restaurants and bars, handicraft stores & gift shops, travel agencies, guided tours, and vehicle hire & rental companies, to name a few.

It will also have rippling effects on the overall economy as almost all other sectors have deep linkages with the tourism industry.
3.6 Moreover, given the number of Fijians that are either directly or indirectly employed in the tourism sector, the negative spill-over effects on the Fijian economy will have considerable fiscal implications for Government not only through reduced tax collections, but also through higher COVID-19 related spending.

3.7 3.8 3.9 In terms of the services sector, the wholesale & retail trade sector is expected to contract due to a mix of low demand and supply issues.
The accommodation & food services sector is also expected to decline as a result of the significant drop in visitor arrivals which have a direct impact on room nights sold.

In addition, domestic tourism is also expected to be affected due to the subdued economy and safety concerns.

The decline in tourism activity coupled with flight and travel restrictions is also bound to affect air transport and related activities.
Disruptions to domestic business activity The impact of COVID-19 will further depress domestic business activity, which had been impacted by the global economic slowdown in 2019.

The uncertainty surrounding COVID-19 poses further risks to foreign direct investment flows, and the spill-over effects on the 6 tourism sector and imposition of movement restrictions will affect businesses in general.
3.10 The construction sector is expected to contract on account of major projects either being halted or delayed due to material and labour shortages as well as reprioritisation of Government’s capital expenditure.

The real estate sector remains subdued.

3.11 The uncertainty surrounding COVID-19 in Fiji will dampen consumer demand and business sales.
While sales may have temporarily spiked due to recent events of panic buying, in general, restriction on social gatherings will also result in lower domestic spending on travel, purchase of non-food items and other associated expenses.

This will impact business turnover with many expected to struggle to meet overhead costs in the months ahead.
3.12 In the primary sector, forestry & logging activity, in particular, pine wood supply is expected to fall given the expectations of a significant decline in demand for woodchips from our two major markets - China and Japan.

In addition, marine fishing (tuna production) will be affected due to weaker demand from major markets of China and Japan and shortage of vessel crew.
Disruptions to trade flows 3.13 During the initial stages of the outbreak when the spread was largely contained to China, supply chain risks were limited to companies that were heavily reliant on Chinese factories for parts and raw materials.

Now that the pandemic has affected most of the advanced economies, waning global demand and supply bottlenecks have led to widespread trade disruptions.
3.14 Global air freight has been depressed by the widespread travel bans and flight cancellations, while sea freight has been affected to some extent from countries that are under lockdown.

This will affect Fijian businesses with direct linkages to China and other major trading partners like Australia, New Zealand and USA.

3.15 Exports in 2020 is projected to contract by 3.4 percent on account of projected global economic slowdown and reduced export demand from China and other trading partners.
Almost all categories of export 7 are anticipated to decline as the outbreak drags down demand and commodity prices.

3.16 Imports in 2020 is also projected to fall by 9.3 percent led by declines anticipated in imports of mineral fuel due to fall in prices of crude oil, machinery & transport equipment, manufactured goods and food & live animals.
3.17 The muted global demand for oil amidst weaker global activity, widespread airline grounding, and recent moves by state actors to flood the market with supply have pushed down oil prices to around US$25 per barrel, with the likelihood of further declines in the coming weeks.

3.18 Given that mineral fuels make up one third of our import bill, this will have a positive, albeit temporary impact on our trade balance.
However, the recent strengthening of the US dollar and the temporary increase in the duty of fuel will to some extent offset the decline in fuel prices locally.

3.19 The trade deficit is expected to narrow to $2,509 million in 2020, equivalent to 22.4 percent of GDP as the fall in imports is much larger than the fall in exports.
Apart from trade, with the anticipated slowdown in global activity, the volume and frequency of personal remittances from Fijians abroad is expected to drop in 2020 with negative implications on foreign reserves (remittances comprise Fiji’s second largest source of foreign reserves), household disposable incomes and consumption activity.

3.20 As such, the current account deficit is expected to widen to 4.0 percent of GDP.
This is on account of larger deterioration in services and secondary income balances which more than offsets the expected improvement in trade deficit and primary income deficit.

The capital and financial account balance (excluding reserve assets) is projected to decline to 11.2 percent of GDP.

3.21 The overall balance of payments for 2020 is forecast to be in deficit and reserve assets are projected to fall.
However, foreign reserves are estimated to remain above 4 months of retained imports benchmark cover by year end.

8 Fiscal implications 3.22 Major Government revenues, particularly VAT, corporate taxes, PAYE, STT, ECAL and departure tax are expected to be hard-hit as business and consumption activities decline.

Given the resulting fiscal constraints, the Fijian Government will reprioritise spending and temporarily increase fiscal deficit and borrowing levels.
3.23 Funding for non-essential programmes will be redeployed, and major capital projects that have not commenced are being deferred.

An effective economic response to the COVID-19 crisis will require the right blend of targeted Government fiscal stimulus and monetary easing by the Reserve Bank of Fiji (RBF) which is discussed in the following sections.
4.0 GOVERNMENT RESPONSE TO COVID-19 Border protection measures 4.1 Many countries have imposed stringent travel restrictions to limit the spread of COVID-19.

In February 2020, the Fijian Government closed its borders to visitors traveling from mainland China, Italy, Iran and South Korea (Daegu City and Cheongdo County).

In March 2020, the ban was further extended to include cruise ships berthing at Fiji ports.
4.2 Border screening measures were ramped up to include handheld temperature scanners and thermal scanning equipment at the international airports.

All international events in Fiji have since been cancelled, all passenger flights suspended, and locals have been advised against mass gatherings.

Going forward, Government may consider additional measures depending on the severity of the outbreak in the country.
Fiscal measures 4.3 The recent developments surrounding COVID-19, its implications on global supply chain disruptions, reduced international demand, subsequent impact on the global economy, plummeted tourism travel and major negative consequences for tax revenues has necessitated a revision and refocus of the 2019-2020 Budget.

9 4.4 4.5 4.6 A COVID-19 Response Budget is critical.
Implementing urgent preventative measures against the outbreak will save Fijian lives, revive consumer, business and investment confidence, and safeguard employment, families and livelihoods.

The COVID-19 Response Budget focuses on redirecting funds to relevant front-line agencies that require additional resources for prevention and containment activities, ensuring food security and maintaining support for the disadvantaged.
An economic package of over $1.0 billion, equivalent to around 8.7 percent of GDP is announced in the COVID-19 Response Budget.

The measures are as follows: i. ii.

To support all employers in Fiji, the statutory FNPF employer contribution is halved from 10 percent to 5 percent effective from 1 April 2020 to 31 December 2020.

This will provide a $130 million relief to employers for the next 9 months.
Employee Contribution is reduced from 8 percent to 5 percent effective from 1 April 2020 to 31 December 2020.

This will put around $80 million back in the pockets of Fijian employees for the next 9 months.

iii.

A lump sum assistance of $1,000 through FNPF will be provided to employees who have lost jobs or are on reduced hours in the tourism and hospitality industry.
For FNPF members who have less than $1,000 in their FNPF General Account, Government will subsidise the remaining balance to make it $1,000.

iv.

A lump sum assistance of $500 through FNPF will be provided to employees who are affected by the lockdown/travel restriction due to COVID-19.

This is only available to employees who are not able to go to work or are not able to work from home (thus not paid by employers).
Those who have less than $500 in their General Account, the balance will be subsidised by Government.

v. For those affected in the informal sector in the lockdown areas, Government will provide a relief payment of $150.

10 vi.

Government will reimburse directly to employers 21 days of COVID-19 leave for employees that test positive and are certified by the Ministry of Health and Medical Services.

This will only be applicable to those with less than $30,000 annual income.

vii.

viii.
vii.

viii.

Fijians employed in the informal sector and tested positive for COVID-19 and are certified by the Ministry of Health and Medical Services will receive a Government assistance of $1,000.

For employers who continue to pay their employees under self- quarantine due to a directive from the Ministry of Health and Medical Services are eligible for a 300 percent tax deduction.

Employees will also be required to take paid family care leave.
Anyone that is not compensated during this 14 day self- quarantine period will be paid $100 by Government.

This will only be applicable to those with less than $30,000 annual income.

ix.

For measures in (iii) to (viii), Government has provided a total budget of $60 million.

It is expected that FNPF will inject around $150 million to support these initiatives.

x.
x.

Apart from these, the Ministry of Health and Medical Services is provided an additional budget of $40 million for the procurement of supplies & consumables, personal protective equipment, thermal scanners, set up of isolation facilities, media awareness, infection control, contact tracing, emergency response and other contingencies.

xi.

For students repaying Tertiary Education Loans, repayments will be suspended until 31 December 2020.

This will provide a relief of around $10 million.

xii.
xii.

All commercial banks in Fiji will offer loan repayment holidays on principal and interest for up to 6 months for businesses and individual customers facing hardship with mortgages and loan repayments due to the COVID-19 pandemic.

This is expected to provide a relief of around $400 million.

11 xiii.
11 xiii.

To support businesses affected by the economic downturn and rebuild confidence in the economy, the RBF is expanding the Natural Disaster Rehabilitation Facility by $60 million to assist those affected by COVID-19.

Commercial banks, Fiji Development Bank and licenced credit institutions can access funds from RBF with an interest rate of 1 percent per annum and lend to eligible businesses at a maximum interest rate of 5 percent.
The SME Credit Guarantee Scheme is expanded to assist small entities affected by COVID-19.

xiv.

A number of taxation and customs policy changes will be implemented to provide immediate relief to businesses and individual taxpayers, revive investment & business activity, industry and protect support exports & employment.

This will provide assistance of over $150 million.

Further specific details are provided in Table 1 of the Appendices.
tourism the Monetary Policy 4.7 4.8 In light of the global effects of the COVID-19 pandemic and its implications on GDP growth, foreign reserves and inflation, the RBF reduced its overnight policy rate to 0.25 percent from 0.50 percent in March 2020.

The reduction is expected to stimulate aggregate demand through reduced cost of borrowing and support consumption and investment activity.
Going forward, the RBF will continue to monitor international and domestic developments and align monetary policy accordingly.

4.9 Monetary policy will continue to focus on supporting the domestic economy through safeguarding foreign reserves and inflation.

Foreign reserves levels are around $2.2 billion, equivalent to 5.7 months of retained imports cover.

4.10 Inflation stood at a historical low of negative 3.0 percent in February 2020 and is forecast to be close to zero percent by year end.
2019-2020 Revised Fiscal Projections 4.11 The unprecedented nature and scale of the challenges posed by the COVID-19 pandemic has necessitated a relook at fiscal priorities to 12 ensure the associated economic and fiscal risks are mitigated.

In this regard, a number of new funding allocations are provided in the COVID-19 Response Budget to contain the spread of the virus and support those adversely affected.
4.12 With the severe negative impact on Fiji’s tourism industry and its widespread impact on other sectors, Government revenue is expected to significantly decline for the remaining months of FY 2019-2020.

This fast growing pandemic has created great uncertainty amongst businesses and consumers alike, and is expected to further dampen economic activity, putting pressure on Government’s fiscal position.
4.13 The decline in tourism and other related businesses have a direct impact on major tax revenues such as VAT collections, departure tax, STT and ECAL.

The substantial decline in business activities is expected to significantly affect income streams of businesses, resulting in lower corporate tax and personal income tax collections.
4.14 Apart from the services sector, other major sectors of the economy such as construction, manufacturing, wholesale & retail and real estate will also be impacted, consequently affecting relevant tax collections.

The supply chain disruptions and delay in the importation of construction materials, raw materials for manufacturing, and goods for wholesale & retail has affected collection of trade taxes by Government.
4.15 Individuals and investors are also anticipated to hold back investments in areas like real estate which is expected to impact stamp duties and capital gains tax collections.

To mitigate this, stamp duty on mortgages has been temporarily reduced to support new investments in real estate.

4.16 Based on this, overall tax collections are projected at $2,022.0 million for FY2019-2020.

This is expected to be lower than the original budget by $1,058.2 million, a decline of 34.4 percent.
Compared to the collections in FY2018-2019, tax revenue will be $797.7 million lower (28.3 percent decline).

Major reductions are expected from VAT collections, income taxes and customs revenue due to reasons explained above.

4.17 Non-tax revenue collections are expected to be higher than both the original FY2019-2020 Budget and collections in FY2018-2019.

Dividends from state-owned enterprises are expected to decrease 13 together with lower collections from various fees, fines and charges.
This decline is compensated by the one-off $206.1 million divestment proceeds from EFL.

4.18 While the pandemic has a major impact on Government revenues, it has also necessitated new expenditure allocations in the COVID-19 Response Budget.

These expenditures are critical for containment and to safeguard the well-being of Fijians, while at the same time prop up business confidence and protect employment.
Table 1: Direct Budget Funding for COVID-19 Details Ministry of Health Fiji Police Force Republic of Fiji Military Forces Ministry of Agriculture Fiji Competition and Consumer Commission Unemployment Benefit – Tourism Sector Unemployment Benefit – Lockdown Areas (Formal Sector) Unemployment Benefit – Lockdown Areas (Informal Sector) Unemployment Benefit – General Assistance to SME’s Contingency Funds (Unemployment) Contingency Funds (General) Total $ million 40.0 0.7 0.15 1.0 0.1 5.6 7.0 3.0 5.0 5.0 5.0 27.5 100.0 4.19 A total of $3,536.4 million has been allocated in the COVID-19 Response Budget.
The revised total expenditure takes into account the current spending trend, reprioritisation of capital expenditures, related anticipated operational savings and new COVID-19 allocations.

4.20 Based on a projected total revenue of $2,507.6 million, the net deficit stands at $1,028.7 million for the COVID-19 Response Budget, equivalent to 9.0 percent of GDP.

The deficit will be financed through both domestic and external borrowings from the Asian Development Bank and the World Bank.
The financing details are provided in the budget estimates.

14 4.21 Table 2 provides Government’s Cashflow Statements1 for 2018-2019 and 2019-2020.
Table 2: Cashflow Statement ($M) 2018-19 (Actual) 2019-20 (Budget) Receipts Direct Taxes Indirect Taxes (excluding SEG 13 VAT) VAT (excluding SEG 13 VAT) Customs Duties Service Turnover Tax Water Resource Tax Departure Tax Stamp Duty Fish Levy Telecommunication Levy Environment & Climate Adaptation Levy Fees, Fines, Charges & Penalties Grants in Aid Dividends from Investments Reimbursement & Recoveries Other Revenue & Surpluses Total Operating Receipts Payments Personnel Transfer Payments Supplies and Consumables Special Expenditures Interest Other Operating Payments Total Operating Payments 2019-20 (Revised Budget) 546.0 1,430.4 502.7 540.4 59.3 49.5 106.2 55.5 0.1 0.9 115.7 118.2 29.1 55.6 36.6 29.6 2,245.5 990.1 673.9 264.6 102.6 349.7 11.8 2,392.7 Net Cashflows from Operating Activities As % of GDP 690.1 5.9% 808.7 6.4% (147.3) -1.3% Receipts Sale of Government Assets Interest from Bank Balance Repayment of Term Loans and Advances 5.4 1.4 10.9 80.0 1.2 7.1 206.1 1.2 4.3 1The numbers exclude SEG 13 or Government VAT.
The exclusion of Government VAT from revenue and a similar amount from expenditure does not affect the overall net deficit position.

Also, minor differences in numbers are due to rounding off decimal places.
15 ($M) Return of Surplus Capital from Investments Total Investing Receipts 2018-19 (Actual) 2019-20 (Budget) 6.4 24.1 6.4 94.7 2019-20 (Revised Budget) 4.9 216.5 Payments Loans Transfer Payments Purchase of Physical Non-Current Assets Total Investing Payments 101.0 871.3 161.2 1,133.5 138.0 897.7 216.9 1,252.6 138.0 796.0 163.9 1,097.9 Net Cashflows from Investing Activities As % of GDP (1,109.4) (1,157.9) (881.5) -9.5% -9.1% -7.7% Net (Deficit)/Surplus As % of GDP (Source: Ministry of Economy) (419.2) -3.6% (349.2) -2.7% (1,028.7) -9.0% 4.22 Table 3 below provides the revised fiscal framework for 2019-2020.
Table 3: 2019-2020 Fiscal Framework ($M) Revenue: As a % of GDP Tax Revenue Non-Tax Revenue Expenditure: As a % of GDP Net Deficit As a % of GDP Debt As a % of GDP GDP at Market Prices (Source: Ministry of Economy) 2018-2019 Actual 3,181.1 27.1 2,819.8 361.3 3,600.3 30.7 (419.2) (3.6) 5,735.2 48.9 11,725.8 2019-2020 Budget 3,491.7 27.5 3,080.2 411.5 3,840.9 30.2 (349.2) (2.7) 5,978.6 47.1 12,703.8 2019-2020 Revised Budget 2,507.6 21.8 2,022.0 485.6 3,536.4 30.8 (1,028.7) (9.0) 6,988.9 60.9 11,479.9 Government Debt and Financing 4.23 Government debt is projected at $6,988.9 million, equivalent to 60.9 percent of GDP by end of July 2020.
The sharp increase in the debt to GDP ratio is due to the large increase in deficit level as Government revenue is expected to decline significantly accompanied by a sizeable downward revision to nominal GDP (9.6 percent lower than original 16 July-20 Forecast 4,992.9 budget forecast).
Moreover, the increase in debt levels is also attributed to $224.9 million (2 percent of GDP) loans drawn in anticipation of refinancing the global bond due in October 2020 and these funds are kept in Government’s offshore account.

4.24 Fiscal measures will be undertaken in the years ahead to bring down the debt level.
Table 4: Government Debt ($M) Particulars Jul-16 Jul-17 Jul-18 July-19 Domestic Debt External Debt Total Debt 3,245.0 3,300.8 3,763.0 4,278.5 1,262.6 1,370.9 1,457.5 1,456.8 1,996.0 4,507.7 4,671.7 5,220.5 5,735.2 6,988.9 Debt (as a % of GDP) Domestic to Total Debt External to Total Debt 44.6 72% 28% 43.9 71% 29% 46.0 72% 28% 48.9 75% 25% 60.9 71% 29% (Source: Ministry of Economy) 4.25 Government through its debt management operations ensures that the debt mix between domestic and external is well-managed to safeguard against any exchange rate risks whilst actively pursuing other avenues to further mitigate exchange rate risks.
Government targets a domestic and foreign borrowing mix of 70:30 (+/-5 percent).

4.26 By end of July 2020, domestic debt is forecast to comprise 71 percent of the total Government debt portfolio while the remaining 29 percent is external debt.

Managing refinancing and interest rate risk continues to be a key focus of Government’s debt management objectives with current indicators being maintained at prudent levels.
4.27 Government is refinancing the US$200 million global bond in October 2020 with policy based loans from the Asian Development Bank (ADB) and the World Bank.

Government has completed a series of sub-programmes as part of the entire policy-based reform programme and has secured US$65 million from ADB and US$35 million from World Bank.
4.28 Government is currently in the advanced stages of the final sub- programme which will result in an additional loan financing of 17 US$200 million by ADB towards global bond refinancing (US$100 million) and budget support for COVID-19 (US$100 million).

4.29 The implementation of reforms under the sub-programmes have been further supported by Australia and New Zealand in the form of grants and technical assistance.
4.30 Since Fiji’s inclusion in the International Development Association (IDA) as an IDA-eligible Small Island on 26 March 2019, Government has accessed approximately US$29 million from IDA and an additional US$29 million from the IDA Scale-up Facility.

This is in addition the International Bank for Reconstruction and Development (IBRD) which brings the total secured financing from the World Bank Group to US$64 million.
As a ‘blend country’, Fiji is able to access financing from both the IDA and IBRD of the World Bank Group.

to US$6 million from 4.31 Given the current global economic slowdown due to the COVID-19 global outbreak, the World Bank and the International Monetary Fund are offering financing facilities to immediately assist countries to deal with the economic and health impacts of the pandemic.

The World Bank has offered US$5.5 million from its COVID-19 facility.
4.32 Apart from this, Government had executed a stand-by loan facility agreement for disaster, recovery and rehabilitation with the Japan International Cooperation Agency in February this year.

This allows Government to access up to JPY 5 billion (around US$50 million) at very concessional terms with a 40-year repayment period inclusive of a 10-year grace period at 0.01 percent interest rate.

The stand-by loan facility is only accessible upon declaration of a natural disaster.
4.33 Overall, below are the key Government debt management objectives:  focus on domestic capital markets as a major source of financing the 2019-2020 Revised Budget and explore offshore borrowings while managing exchange rate and interest rate fluctuations;  maintain an optimal cost and maturity structure for Government’s debt portfolio to ensure prudent liability management; 18   actively pursue opportunities to refinance debt at lower cost, like the refinancing of the Global Bond due in October 2020; develop the domestic bond market to focus more on liquidity, transparency, secondary market trading, settlement mechanism and investor diversification;  minimise risks associated with on-lending and contingent liabilities; and  manage foreign debt repayments to minimise foreign exchange rate risks.
4.34 Government will work to further restructure the Fiji Sugar Corporation (FSC) with a view to strengthening its balance sheet and to ensure that the entity becomes commercially viable.

4.35 In addition to a $50 million budget support to FSC for cane delivery payments, Government loans to FSC will be converted to equity.

Similarly, Government will also convert its loans to PAFCO, Fiji Rice Limited, Food Processors Limited and Viti Corp Company Limited into equity.
5.0 5.1 5.2 FISCAL OUTLOOK WITH COVID-19 The COVID-19 Response Budget is strategically aimed at mitigating the impact of the pandemic on the Fijian economy, businesses and implementing proactive measures employment.

Government through this budget to safeguard Fijian lives, families and economy.

is The debt to GDP ratio has increased substantially as a result of the large fiscal deficit in this COVID-19 Response Budget and the contraction in the economy.
However, debt to GDP is expected to fall as the economy recovers and budget deficits reduce in the medium term.

19 Table 1: Revenue Policy Part 1 – Direct Tax Measures Appendices i.

Income Tax Act Policy 1.

Export Income Deduction Incentive 2.

New Hotel Investment Incentive Package Description  The Export Income Deduction (EID) will be increased from 50% to 60% for the tax years 2020, 2021 and 2022.

 The existing package will be repealed and replaced with the following: i.
Short Life Investment Package (SLIP)  Income tax exemption for the construction of new hotels based on the following capital investment levels: Capital Investment ($) $250,000 - $1,000,000 $1,000,000 - $2,000,000 More than $2,000,000 Tax Holiday 5 Years 7 Years 13 Years ii.

Standard Allowance  An Investment allowance of 25% will be allowed on the the construction, incurred for capital expenditure renovation, refurbishment and extension.

 This applies to new and existing hotels.


3. Business losses  The new Hotel Investment Incentive Package will be applicable from 1 April, 2020 to 31 December 2022.

 Business losses of up to $20,000 will be allowed to be deducted against employment income to compute the chargeable income and the overall tax position of the personal income taxpayers.

4.

Provisional Tax  The certificate of exemption will be reintroduced for the 5% Provisional Tax.

5.

Advance Payments of Tax 6.


Debt Forgiveness % to 9 payments at a rate of 11  The rule for advance payment of tax for companies and other taxpayers will be relaxed from the current 3 payments at a rate of 33 1  Penalties on estimated tax will also be removed.

 The policy will be valid until 31 December 2020.

 Debt forgiveness will not be subject to income tax.

 Applies to forgiving of any outstanding debt.

This will be %.

3 1 9 7.


Thin Capitalization  Thin capitalization rules will be suspended for borrowings undertaken from 01 April 2020 up to 31 December 2020. applicable from 01 April 2020 to 31 December 2020.

20 Policy 8.

Tax deduction for salary/ wages paid for quarantined/ isolated employees 9.

Employment Taxation Scheme 10.

Contribution to the COVID-19 Fund 11.


Depreciation write-off Description  A 300% tax deduction will be allowed to employers for wages/ salary paid to employees who are self-quarantined and approved by Ministry of Health and Medical Services.

 Employment Taxation Scheme to be incentivised further as follows: a.

Tax deduction on wages paid on first full-time employee will be increased from 200% to 300%.

b.
b.

Tax deduction on wages paid for work placements in the related area of study up to 6 months in a year before graduation, as part of the course requirements will be increased from 200% to 300%.

c. Tax deduction on wages paid to students employed on a part- time basis (in the related area of study up to 3 months in a 12- month period) will be increased from 200% to 300%.
d. Tax deduction on wages paid in the employment of disabled people employed for 3 consecutive years will be increased from 300% to 400%.

ETS has been extended till 2023.

 A 300% tax deduction will be available for donation made to the COVID-19 Fund.

 A 100% write-off will be available on purchases of fixed assets of incentive up to $10,000 for business purposes.

12.

Accelerated Depreciation 13.

Film Making and Audio-Visual Incentives 14.


Tax deduction for reduction of commercial rent  This will be applicable on purchases up to 31 December 2020.

 A 100% write-off available for the construction of a new commercial and industrial buildings provided approvals are obtained prior to 31 December 2020.

 Processing of new provisional applications for the Film Tax Rebate as well as pending payments will be suspended until further notice.
 The provisions under the Income Tax (Film-Making and Audio Visual incentive) Regulations remain unchanged.

 A tax deduction will be accorded to landlords for reduction of commercial rent.

The reduction refers to the rent payable after 01 April 2020 to 31 December 2020.

 The deduction will only apply to existing rental contracts.

 Landlord will have to provide record of rental income received for the past 6 months.

21 ii.

Tax Administration Act Policy 1.


Waiver of penalty for late lodgement Description  Waiver of penalty for failure to file a tax return or lodge other documents by the due date.

 The waiver will apply to all late lodgement penalties incurred after 01 April 2020 until 31 December 2020. iii.

Stamp Duty Act Policy 1.

Stamp duty on mortgages Description  Stamp duty levied on mortgages for resident tax payers will be reduced from 1.75% to 0%.
 Stamp duty levied on mortgages for foreign tax payers will be reduced from 5% to 0%.

2.

Air Waybills  Effective from 01 April 2020 to 31 December 2020.

 $10 Stamp Duty on Air Waybills for any goods, merchandise, or effects exported from Fiji will be removed.

22 Part 2: Indirect Tax Measures i.

Value Added Tax Act Policy 1.

VAT Monitoring System (VMS) 2.


VAT exemption on medical supplies Description  The implementation of VMS as captured in the Electronic Fiscal Device (EFD) Regulations will be deferred to 01 January 2021.

 The VMS will be applicable on gross turnover of more than $100,000.

 The taxpayers who voluntarily register for VAT (that is, those presently below $100,000) will not be captured in VMS.
 To assist the medical sector during the COVID-19 crisis, importation of the following items will be exempt from Import VAT:  Hand sanitizers and antibacterial hand wash;  Gloves (surgical, medical, knitted, crocheted with plastic coating);  Masks;  Disposable hair nets;  Disinfectant wipes;  Tissue papers;  Face shield;  Medical goggles and spectacles (used in the lab and medical facilities);  Protective plastic garments for surgical and medical use;  Protective garments of textiles or rubberised textiles;  Long sleeve medical gowns;  Scanners and cameras used in medical examination;  Ethanol for companies involved in hand sanitizer production;  Disinfectants;  Vaccinations and Medicaments of Chapter 30 of the Customs Tariff;  Air purifier;  Boots – specifically used in medical environment;  Hospital beds;  Hydrogen peroxide;  Paper bed sheets;  Thermometers; and  Medical equipment under Chapter 90 of the Customs Tariff.
23 ii.

Customs Tariff Act - Fiscal Duty Changes Policy 1.

Hand sanitizers and antibacterial hand wash Description  Fiscal duty on hand sanitizers and hand wash will be reduced from 32% to 0%.

2.

Gloves  Fiscal duty on medical and surgical gloves will be reduced from 5% to 0%.

 Fiscal duty on plastic gloves will be reduced from 32% to 0%.

 Fiscal duty on knitted, crocheted and textile gloves will be reduced from 32% to 0%.

3.

Masks  Fiscal duty on masks will be reduced from 32% to 0%.

4.
4.

Disposable hair nets  Fiscal duty on disposable hair nets will be reduced from 15% to 0%.

5.

Disinfectant wipes  Fiscal duty on disinfectant wipes will be reduced from 32% to 0%.

6.

Tissue papers  Fiscal duty on tissue papers will be reduced from 32% to 0%.

7.

Face shield (medical  Fiscal duty on face shield used for medical purposes will be reduced use) from 15% to 0%.

8.

Medical goggles and  Fiscal duty on medical goggles and spectacles to be reduced from spectacles 5% to 0%.

9.
9.

Protective garments  Fiscal duty on protective garments for surgical and medical use will be reduced from 32% to 0%.

 Fiscal duty on protective garments of rubberised textiles and plastic will be reduced from 32% to 0%.

10.

Long sleeve medical  Fiscal duty on long sleeve medical gowns will be reduced from gowns 32% to 0%.

11.

Ethanol for companies hand involved sanitizer production in  Fiscal duty on ethanol (undenatured 80% or more ethyl alcohol) will be reduced from $198.60 to $0.
 Fiscal duty on ethanol (undenatured 75% or more ethyl alcohol) will be reduced from $198.60 to $0.

12.

Disinfectants/  Fiscal duty on disinfectants/ sterilisation products will be reduced sterilisation products from 32% to 0%.

13.

Hospital beds  Fiscal duty on the importation of hospital beds will be reduced from 14.

Hydrogen peroxide  Fiscal duty on the importation of hydrogen peroxide in bulk will be 5% to 0%.

reduced from 5% to 0%.


 Fiscal duty on the importation of hydrogen peroxide presented as a medicament (put up for internal or external use as a medicine including as an antiseptic for the skin) will be reduced from 15% to 0%.

 Fiscal duty on the importation of hydrogen peroxide put up in disinfectant preparations for cleaning surfaces will be reduced from 5% to 0%.

24 Policy 15.

Paper bed sheets Description  Fiscal duty on the importation of paper bed sheets will be reduced 16.
Thermometers  Fiscal duty on the importation of thermometers will be reduced from 32% to 0%.

17.

Air purifier  Fiscal duty on the importation of air purifier will be reduced from from 5% to 0%.

18.

Boots used environment) in (specifically medical 19.

Fuel 5% to 0%.

 Fiscal duty on the importation of boots (specifically used for medical environment) will be reduced from 32% to 0%.
 Fiscal duty on the importation of Diesel (HS: 2710.12.31, 2710.12.32, 2710.20.31, 2710.20.32) will increase by 20 cents per litre.

 Fiscal duty on the importation of Petrol (Benzene) (HS: 2710.12.11, 2710.12.12, 2710.12.19, 2710.20.11, 2710.20.12, 2710.20.19) will increase by 20 cents per litre.

25 iii.

Import Excise Duty Policy 1.

Ethanol for  companies involved the production of hand sanitizers in 2.
Boots (specifically in medical used environment)   Description Import excise on ethanol (undenatured 80% or more ethyl alcohol) will be reduced from 15% to 0%.

Import excise on ethanol (undenatured 75% or more ethyl alcohol) will be reduced from 15% to 0%.

Import excise on the importation of boots (specifically used for medical environment) will be reduced from 10% to 0%.

iv.

Customs Legislation Policy 1.


Bonded Warehouse Description  The warehousing period for all goods in a bonded warehouse will have a 6- month extension provision.

Section 52 of the Customs Act will be amended accordingly.
26 Table 2: Gross Domestic Product by Sector 2015-2022 ($M) Activity AGRICULTURE General Government Subsistence Formal Non-Government Agriculture Taro Sugarcane FORESTRY AND LOGGING FISHING AND AQUACULTURE Formal Non-Government Fishing and Aquaculture MINING & QUARRYING MANUFACTURING Informal manufacturing Sugar Mineral water Wearing apparel ELECTRICITY, GAS, STEAM AND AIR CONDITIONING SUPPLY WATER SUPPLY, SEWERAGE, WASTE MANAGEMENT AND REMEDIATION ACTIVITIES CONSTRUCTION Formal Non-Government Construction WHOLESALE AND RETAIL AND REPAIR OF MOTOR VEHICLES AND MOTOR CYCLES Informal WRT Formal Non-Government WRT TRANSPORT AND STORAGE Formal Non-Government Transport & Storage Water & air transport ACCOMMODATION AND FOOD SERVICE ACTIVITIES Formal Non-Government Accommodation and Food Service Activities Short term accommodation activities/camping grounds, recreational vehicle parks and trailer parks INFORMATION AND COMMUNICATION Formal Non-Government Information and Communication Wired telecommunications activities Wireless telecommunications activities FINANCIAL AND INSURANCE ACTIVITIES Central banking Other monetary intermediation Activities of holding companies Base Weight 8.3 0.1 1.8 6.0 0.9 1.3 0.8 1.2 0.8 0.9 13.5 2.5 0.9 1.0 1.1 2015 2016r 2017r 2018p 2019(e) 2020f 2021f 2022f 60.3
Activity Base Weight 2015 2016r 2017r 2018p 2019(e) 2020f 2021f 2022f 151.4 300.6 230.9 191.2 2.0 9.4 2.4 188.3 148.6 144.0 186.9 737.3 138.2 755.2 154.7 173.3 181.1 4.0 3.1 298.6 229.5 291.3 224.6 294.8 223.8 268.1 204.2 REAL ESTATE ACTIVITIES Owner Occupied Dwellings PROFESSIONAL, SCIENTIFIC AND TECHNICAL ACTIVITIES ADMINISTRATIVE AND SUPPORT SERVICES PUBLIC ADMINISTRATION AND DEFENCE; COMPULSORY SOCIAL SECURITY General Public administrative activities Defence activities Public order and safety activities EDUCATION HUMAN HEALTH AND SOCIAL WORK ACTIVITIES ARTS, ENTERTAINMENT AND RECREATION ACTIVITIES OTHER SERVICE ACTIVITIES GVA @ CONSTANT PRICES) ADD NET TAXES REAL GDP Sources: Fiji Bureau of Statistics & RBF Estimates; r = revised, p = provisional, e = estimate, f = forecast 190.2
Table 3: GDP Growth by Sector 2015–2022 (% Change) Activity Base Weight 2015 2016r 2017r 2018p 2019e 2020f 2021f 2022f AGRICULTURE General Government Subsistence Formal Non-Government Agriculture Taro Sugarcane FORESTRY AND LOGGING FISHING AND AQUACULTURE Formal Non-Government Fishing and Aquaculture MINING & QUARRYING MANUFACTURING Informal Manufacturing Sugar Mineral water Wearing apparel ELECTRICITY, GAS, STEAM AND AIR CONDITIONING SUPPLY WATER SUPPLY, SEWERAGE, WASTE MANAGEMENT AND REMEDIATION ACTIVITIES CONSTRUCTION Formal Non-Government Construction WHOLESALE AND RETAIL AND REPAIR OF MOTOR VEHICLES AND MOTOR CYCLES Informal WRT Formal Non-Government WRT TRANSPORT AND STORAGE Formal Non-Government Transport & Storage Water & air transport ACCOMMODATION AND FOOD SERVICE ACTIVITIES Formal Non-Government Accommodation and Food Service Activities Short term accommodation activities/camping grounds, recreational vehicle parks and trailer parks INFORMATION AND COMMUNICATION Formal Non-Government Information and Communication Wired telecommunication activities Wireless telecommunications activities FINANCIAL AND INSURANCE ACTIVITIES Central banking Other monetary intermediation Activities of holding companies REAL ESTATE ACTIVITIES Owner Occupied Dwellings PROFESSIONAL SCIENTIFIC AND TECHNICAL ACTIVITIES -0.1 8.5 -2.7 0.7 -21.3 -4.6 -6.2 16.4 5.9 -0.1 -6.1 -1.8 -6.3 23.5
 1.9 4.0 5.6 3.6 0.2 5.1 -5.0 -5.3 -25.7 5.4 -8.7 -9.8 -2.0 -10.6 -35.7 -25.0 -44.1 -10.3 -15.4 6.1 6.0 0.5 -33.5 65.7 3.5 19.6 12.0 12.1 1.0 15.9 12.0 17.8 -7.3 6.9 11.3 -20.7 1.4 1.5 -7.7 22.9 15.5 33.9 0.2 13.0 10.1 12.4 8.9 0.4 12.4 -10.1 -10.4 -22.9 -9.8 9.7 7.5 1.7 0.6 2.1 10.6 11.2 19.0 5.8 5.5 3.4 0.4 7.2 14.5 4.0 24.0 -12.3 -16.2 -13.5 1.5 0.8 -34.2 5.5 5.7 28.7 5.6 7.4 9.4 -3.0 0.6 -4.2 -1.7 -2.0 -6.2 6.1 4.3 1.0 0.6 5.4 12.0 6.5 -2.8 2.1 3.2 -6.0 1.1 0.6 -5.0 3.0 1.0 9.9 2.8 1.7 2.0 0.7 0.6 0.7 -3.5 -3.6 -15.0 3.9 3.6 1.0 0.6 4.6 5.0 5.0 -1.6 0.9 1.4 0.5 0.4 0.6 -5.0 3.0 -1.0 9.9 2.8 -6.2 -10.0 -10.0 0.6 -1.2 -1.1 -1.2 -10.0 -13.2 2.4 1.0 0.6 2.9 3.0 1.0 0.7 1.3 2.0 0.5 2.1 0.6 1.0 5.0 3.0 4.0 2.8 3.5 5.0 2.0 0.6 1.7 3.3 3.3 4.0 2.1 5.5 -10.0 6.0 6.2 4.0 -13.5 2.2 5.9 -8.6 5.8 6.8 4.0 -15.0 2.0 -3.6 -3.0 -1.8 0.6 6.0 -1.8 7.2 0.7 8.7 10.0 3.2 2.3 2.3 -7.9 3.5 1.2 1.6 2.5 0.4 2.5 2.2 0.7 3.9 4.0 0.0 5.0 1.7 1.0 2.0 1.0 0.7 0.6 1.5 3.8 3.9 1.0 5.0 2.9 1.0 4.0 1.0 -2.4 0.6 1.6 3.9 3.9 1.0 5.0 1.6 0.0 2.0 1.0 0.7 0.6 1.9 10.6 10.8 -1.0 17.0 0.7 -3.0 3.7 0.2 2.0 0.9 1.2 8.7 8.4 0.4 8.2 -2.0 1.0 4.8 0.2 -9.1 - Activity Base Weight 2015 2016r 2017r 2018p 2019e 2020f 2021f 2022f 9.4 2.4 3.2 2.9 4.2 7.6 2.7 8.6 2.0 -10.7 ADMINISTRATIVE AND SUPPORT SERVICE PUBLIC ADMINISTRATION AND DEFENCE; COMPULSORY SOCIAL SECURITY General public administrative activities Defence activities Public order and safety activities EDUCATION HUMAN HEALTH AND SOCIAL WORK ACTIVITIES ARTS, ENTERTAINMENT AND CREATION ACTIVITIES OTHER SERVICE ACTIVITIES GVA @ CONSTANT PRICES ADD NET TAXES REAL GDP Source: Fiji Bureau of Statistics & RBF Estimates; r = revised, p = provisional, e = estimate, f = forecast 20.8 6.1 4.8 2.7 7.9 0.5 -0.4 0.7 -4.7 7.0 3.5 4.5 7.3 -4.0 -2.1 4.1 -0.8 4.5 8.5 5.4 2.2 2.4 2.6 7.6 0.7 0.5 9.9 2.5 3.8 4.0
 7.3 4.7 2.0 2.1 7.9 3.5 1.2 100.0 -0.6 -1.1 0.8 2.2 0.4 2.6 0.9 2.5 6.3 5.9 1.9 0.3 0.0 1.0 0.0 1.7 4.9 2.0 0.5 1.7 -3.0 0.5 -7.7 0.9 1.0 1.0 0.0 1.7 3.2 2.0 0.5 -0.9 -15.0 -4.3 2.2 1.0 1.0 1.0 1.0 1.7 3.2 2.0 0.5 2.2 1.0 1.9 1.6 1.0 1.0 1.0 1.0 1.7 2.8 2.0 0.5 3.8 0.0 3.0 Table 4: Nominal GDP ($M and %) 2019e 11,846.0 2.5 Sources: Fiji Bureau of Statistics & RBF estimates; r = revised, p = provisional, e = estimate, f = forecast NOMINAL GDP Growth Rate (%) 2018p 11,557.4 4.5 2016r 10,327.3 5.1 2017r 11,065.0 7.1 2015 9,822.1 7.1 NGDP @ Market Prices Growth Rate (%) Table 5: Fiscal Year Nominal GDP ($M and %) 2018-19f 11,725.8 2017-18e 11,352.2 2016-17 10,648.3 2015-16 10,108.3 5.7 5.3 6.7 3.3 2020f 11,218.3 -5.3 2021f 11,614.6 3.5 2022f 12,200.6 5.0 2019-20f 11,479.9 -2.1 2020-21f 11,449.5 -0.3 2021-22f 11,956.5 4.4 Source: RBF estimates; e = estimate; f = forecast Note: *Figures are rounded-off 2018r 78.5 15.0 113.7 100.4 100.8 30.8 7.7 97.2 263.6 385.6 917.1 2,120.0 2,110.3 (Sources: Fiji Bureau of Statistics & RBF estimates; r = revised, p = provisional, f = forecast) Table 6: Total Exports by Major Commodities 2015–2022 ($M) 2017r 178.6 18.1 118.7 19.7 94.4 19.7 6.3 91.4 243.4 398.4 845.8 2,035.6 2,034.5 COMMODITIES Sugar Molasses Gold Timber Fish Yaqona Textiles Garments Mineral Water Others Re- Exports (Exc.Aircraft) Total Exports Total Exports excl.
Aircraft 2016 117.2 5.6 121.1 55.3 107.3 14.3 6.8 102.3 214.4 389.3 814.7 1,930.9 1,929.0 2015 129.4 19.6 93.1 85.1 115.9 8.8 6.9 110.0 199.8 374.1 898.6 2,059.2 2,049.5 2019p 97.6 17.7 108.6 57.0 95.2 32.5 7.6 93.7 293.5 506.4 858.0 2228.8 2167.8 2020f 93.2 17.7 90.0 48.5 80.9 35.2 7.4 84.3 312.0 482.2 947.8 2103.5 2093.5 2021f 106.1 18.0 91.8 49.7 82.7 38.1 7.6 86.0 331.0 496.9 931.9 2141.3 2131.3 2022f 108.7 18.0 93.6 57.0 83.0 41.2 7.8 95.0 331.0 513.8 949.3 2192.7 2182.7 30 Commodities Total Exports Total Exports Excl.
Aircraft Growth Rate (%) Table 7: Fiscal Year Exports 2015-2022 ($M) 2018- 2019p 2,434.8 2,376.9 14.2 2016- 2017r 1,918.8 1,917.7 -8.1 2017- 2018r 2,091.0 2,081.3 8.5 2,087.4 2,087.4 2015-2016 2019- 2020f 2159.7 2127.1 -10.5 2020- 2021f 2124.4 2114.2 -0.6 2021- 2022f 2169.7 2159.5 2.1 Sources: Fiji Bureau of Statistics & RBF estimates; r = revised, p = provisional, f = forecast Note: *Figures are rounded-off Table 8: Total Imports by Category 2015–2022 ($M) ECONOMIC CATEGORY Food Beverage & Tobacco Crude Materials Mineral Fuels Oil & Fats Chemicals Manufactured Goods Machinery & Transport Equipment -of which large items Miscellaneous Manufactured Goods Other Commodities Total Imports Total Imports Excl.
Aircraft 2015 803.4 48.6 38.9 996.8 47.2 391.4 696.8 1,283.5 94.9 417.1 33.0 4,756.8 4,661.9 2016r 786.7 44.8 66.7 725.8 41.6 418.5 772.5 1,469.2 8.8 468.0 26.2 4,820.1 4,811.3 2017r 794.9 49.3 47.9 930.5 51.6 427.3 760.4 1,373.3 30.1 510.3 32.0 4,963.8 4,933.7 2018r 802.0 58.0 71.6 1,165.1 49.3 500.0 808.5 1,728.5 139.8 486.1 26.9 5,696.1 5,556.3 2019p 787.4 55.6 56.6 1,123.7 38.7 421.5 720.3 2,317.6 934.7 460.6 28.6 6,010.5 5,075.8 2020f 719.4 52.8 55.7 945.0 38.5 414.4 642.1 1255.8 156.1 451.9 27.2 4758.3 4602.2 2021f 755.7 54.9 58.5 973.3 39.7 434.0 671.2 1312.1 153.4 473.8 28.5 4954.5 4801.1 Sources: Fiji Bureau of Statistics & RBF estimates; r = revised, p = provisional, f = forecast Table 9: Fiscal Year Imports 2015-2022 ($M) Commodities Total Imports Total Imports Excl.
Aircraft Growth Rate (%) 2015-2016 5,163.5 5,138.9 7.1 2016- 2017r 4,988.1 4,986.9 -3.0 2017- 2018r 5,376.6 5,320.0 6.7 2018- 2019p 5,669.2 5,432.4 2.1 2019- 2020f 5352.1 4501.0 -17.1 2020- 2021f 4864.6 4708.8 4.6 Sources: Fiji Bureau of Statistics & RBF estimates; r = revised, p = provisional, f = forecast Note: *Figures are rounded-off 2022f 794.4 57.1 61.4 1002.5 40.9 454.6 701.7 1371.7 88.3 497.2 29.9 5099.2 5010.9 2021- 2022f 5034.5 4888.1 3.8 31 Table 102: Balance of Payments 2015-2022 ($M) ITEMS 2015r 2016r 2017r 2018p 2019e 2020f 2021f 2022f BALANCE ON GOODS -1,912.4 -2,086.2 -2,258.5 -2,820.7 -3,081.9 -1,890.7 -1,999.5 -2,041.6 Exports f.o.b Imports f.o.b BALANCE ON SERVICES Export of Services Import of Services BALANCE ON PRIMARY INCOME Income from non-residents Income to non-residents BALANCE ON SECONDARY INCOME Inflow of current transfers Outflow of current transfers.
CURRENT ACCOUNT BALANCE CURRENT ACCOUNT BALANCE (Excluding aircraft) CAPITAL ACCOUNT BALANCE FINANCIAL ACCOUNT BALANCE (Excluding RA) Errors & Omissions -596.5 -569.7 -874.5 -752.7 -937.2 -899.9 -916.3 - -343.0 -374.7 -743.6 -982.6 -1,271.0 -609.8 -569.3 -513.3 -278.0 -374.3 -713.4 -938.8 -336.3 -453.7 -415.9 -425.0 6.4 9.0 9.1 10.4 10.4 10.4 10.4 10.4 -315.1 -643.1 -1,050.9 1,402.4 1,245.4 12,40.8 1,368.8 1,406.3 158.2 -269.1 31.5 -682.4 222.6 -681.7 -735.0 -881.5 RESERVE ASSETS 136.7 8.3 347.9 -263.8 207.4 -40.3 74.8 21.9 Sources: Fiji Bureau of Statistics & RBF estimates; r=revised, p = provisional, f = forecast 2This table is presented in general accordance with the principles laid down by the International Monetary Fund, in the sixth edition of the Balance of Payments Manual.
32 Table 11: Tourism Statistics 2015–2022 Visitors Average length of stay (days) Visitors days (millions) Earnings (F$M) 2015p 754,835 11.3 7.0 1,683.4 2016p 792,320 11.2 7.0 1,823.3 2017p 842,884 11.2 7.4 1,924.3 2018p 870,309 11.2 7.7 2,010.3 2019 894,389 11.2 8.0 2,065.5 2020f 760,231 11.2 7.0 1,652.3 2021f 783,038 11.2 7.0 1,817.6 2022f 806,529 11.2 7.0 1,000.3 Sources: Fiji Bureau of Statistics, RBF Estimates; p = provisional, f = forecast Table 12: Sugar Production, Export and Price 2015–2022 Export Quantity Sugar (000 tonnes) Unit Value (FJ$/tonne) Sugar Export Earnings (F$M) Molasses Export Earnings (F$M) 2015 176.8 731.9 129.4 19.6 2016 143.0 721.0 117.2 5.6 2017r 198.9 897.9 178.6 18.1 2018r 114.4 686.0 78.5 15.0 2019p 132.0 739.0 97.6 17.7 2020f 125.0 745.3 93.2 17.7 2021f 141.4 750.2 106.1 18.0 2022f 145.0 749.9 108.7 18.0 Sources: Fiji Bureau of Statistics, Fiji Sugar Corporation & RBF Estimates; r = revised, p = provisional, f = forecast Table 13: Inflation Rates 2015–2020 All items Food and Non Alcoholic Beverage Alcoholic Beverages, Tobacco and Narcotics Clothing & Footwear Housing, Water, Elec., Gas and Other Fuels Furnishings Hhld Equip.
& Routine Hhld Maint.
Health Transport Communications Recreation & Culture Education Restaurant & Hotels Miscellaneous Goods & Services Source: Fiji Bureau of Statistic 2015 2016 2017 2018 2019 Feb-20 1.6 5.0 7.3 2.5 -4.3 0.8 1.1 -2.6 0.2 2.2 0.0 0.0 3.8 2011 Base 3.9 2.9 35.4 0.9 -4.2 -0.6 4.5 -3.6 -1.7 -2.5 9.0 3.9 -0.9 2.8 -2.8 26.1 0.7 2.2 -0.9 0.6 1.8 -0.2 0.4 0.0 3.0 -1.0 4.8 5.1 17.2 0.2 3.7 2.0 -2.2 3.4 0.1 0.2 0.0 0.8 0.7 2014 Base -0.9 2.8 -4.3 1.9 -1.9 0.0 0.1 -0.5 -15.0 0.0 5.2 0.9 3.7 -3.0 -6.1 -8.1 2.4 -0.5 -0.3 0.0 4.4 0.2 0.0 0.0 1.9 4.9 33 Table 14: Employment by Sector 2010–2017 (in thousands of persons) ECONOMIC ACTIVITY Agriculture, Forestry Fishing Mining & Quarrying Manufacturing Electricity, Gas & Air Conditioning Supply Water Supply; Sewerage, waste management and Remediation activity Construction Wholesale and Retail; Repair of motor vehicles and motor cycle Transport and Storage Accommodation and Food Services Information and Communication Financial and Insurance activities Real Estate Activities Professional Scientific and Technical Activities Admin and Support Services Activities Public admin and defence compulsory social security Education Human Health and social work activities Arts, Entertainment and recreation Other Service Activities Activities of household as employers; undifferentiated Total 2010r 2.2 0.9 20.9 0.7 1.3 6.4 20.7 8.2 13.5 2.2 3.8 1.0 3.1 6.0 13.8 14.8 4.9 0.5 1.4 0.1 126.6 2011r 2.3 1.5 21.0 0.8 1.9 6.1 21.3 8.7 13.6 2.7 3.7 1.1 3.8 6.5 13.8 15.4 5.2 0.5 1.6 0.1 131.6 2014p 2.7 2.1 20.1 0.8 2.4 11.3 21.2 8.7 13.4 4.6 5.0 0.5 2.5 7.5 15.8 16.3 5.8 0.6 2.6 0.0 144.2 2016e 5.7 2.0 20.1 0.8 3.2 11.6 29.0 13.3 16.9 3.8 5.2 0.7 5.9 7.2 17.0 15.9 9.3 0.7 1.6 0.7 170.6 Source: Fiji Bureau of Statistics Note: The change in the classification of industries is derived from the Fiji Standard Industrial Classification (FSIC) 2010 which was 2017e 5.7 2.0 23.3 0.8 3.3 11.7 30.0 13.3 17.2 3.9 5.3 0.7 5.9 7.5 17.1 16.7 7.5 0.7 1.6 0.7 174.8 enhanced to suit and reflect Fiji’s current economic phenomena.
Latest data is for the period 2015-2016. r=revised; e= estimate; p=provisional 34 REPUBLIC OF FIJI ECONOMIC AND FISCAL UPDATE SUPPLEMENT TO THE COVID-19 RESPONSE BUDGET ADDRESS Ministry of Economy 26 March 2020