review takes into account the combined impact of ongoing buoyancy in domestic demand on the one hand and the possible deterioration in external demand from a global slowdown, on the other hand. however, i can say that the economic growth for this year is expected to be close to the earlier forecast. despite the increasing global uncertainty, our monetary policy objectives remain at comfortable levels. inflation continues on a general downward trend registering 3. 7 percent in september and is forecast to fall further to 3. 5 percent by year - end, driven by lower prices for food and stability in oil prices. foreign reserves are currently around $ 1. 6 billion, sufficient to cover 5. 0 months of retained imports of goods and non - factor services. turning to fiji ’ s financial system, i am pleased to confirm that this continues to be sound. developments in the various sectors have been reflective of the growth in the total assets of our financial institutions. the key prudential indicators of our banking system also remain favorable. the satisfactory performance of the banking system is attributed to : • strong levels of capital ; • satisfactory asset quality ; bis central bankers ’ speeches • adequate liquidity ; • good management ; • sound profitability ; and • revived lending trends after a sustained period of benign growth there has also been a rapid development of innovation in the domestic financial sector with growth in areas of mobile banking, electronic banking initiatives and atm and eftpos interconnectivity, to name a few. with such favorable indicators, the entrance of bred bank is considered timely, and it is expected that customers will benefit from healthy competition within the industry. bred bank is also optimistic that, with its co - operative style and approach, it will deliver a banking experience for fiji that compares favorably with any other. overall operations with a capital injection of approximately $ 40. 0 million, bred bank opens its first branch at this mhcc complex, with plans to open other branches around fiji. from our discussions it has been noted that the bank also has plans to establish satellite branches in close proximity to large residential and industrial / commercial areas, as well as kiosks in shopping centers. one of the other key strengths of the institution is its 100 percent local management and staff. concluding remarks ladies and gentlemen, investments like bred bank ( fiji ) limited serve to fuel and drive the increasing positive sentiment in our economy. i would like to once again thank satish for his kind invitation. i reiterate my appreciation to the board, management

trading barriers and forced small nations to compete for a market for their goods and services internationally. • weather and environment problems, beyond our control, hinder economic performances as disaster recoveries are costly. rising sea levels, a result of global pollution, is a major issue that are already forcing islanders from their homes. • capacity constraints in pacific islands include a lack of skills and resources, necessary for economic development. the migration of skilled workers, exacerbate these problems. • political stability is required to ensure an environment conducive for investment. 5. what is the single major challenge for pacific islands? • pacific islands need to lift their economic growth levels. • growth must be sustainable and inclusive driven by private sector investment. • long - term sustainable growth is the only way to create jobs, improve living standards and reduce poverty. • millennium developments goals must be pursued actively. 6. how can we raise growth sustainably? • private sector development is needed to become the engine for growth. there is currently too much reliance on governments for direct investment and employment creation. • private sector development can give our small island economies the sustainable platform that we need. • such development can also in the long term ease the burden on governments. • private sector development continues to be a challenge because of good governance issues, uncertainty of policy consistency by the government, poor infrastructure and the need for law and order. 7. role of the state • the role of state is to create an environment that encourages private sector development through appropriate policies, services and infrastructure. • they are responsible for the provision of public goods and social services. • “ the best government is the least government ”. it is ideal when employment is created by the private sector, not governments. 8. lesson from asia – what else is needed? • investment is the greatest hurdle. raising investment by seeking out its impediments and removing them. to reach the average level of investment of developing countries, that is, 25 percent of gdp, fiji needs an additional $ 400m in investment. • economic growth cannot be lifted sustainably without reforms. the benefits of reforms include improved delivery of service, better allocation of resources and reduced tax payers ’ burden. • a few challenges remain for fiji given its smallness and vulnerability. a. improving our exports level and base through diversification b. improve our competitiveness through greater capacity utilisation and resource allocation c. raising our productivity in order to improve our competitiveness d. political stability has to