the building & construction have reached $ 125 million followed by transport, storage & communication ( $ 21 million ), electricity, gas & water ( $ 16 million ) and manufacturing ( $ 16 million ). other miscellaneous approvals totalled $ 72 million. recent figures show a moderate recovery in bank lending. fiji ’ s tourism industry • visitor arrivals : visitor arrivals are at historical highs. a strong recovery in visitor arrivals by an annual 12 percent was seen in the first seven months of the year. using the fiji islands visitors bureau ’ s growth forecast of around 571, 000 visitors for 2008 translates to a projected annual growth rate of around 6 percent. • visitor arrivals by country : our nearest neighbours, australia and new zealand, account for more than half ( 56 % ) of our visitor source market. the growing markets of us ( 12 % ), canada ( 3 % ) and europe ( 15 % ), provide us with 30 % of our visitors. • tourism earnings : while we note historically high levels in visitor arrivals, tourism earnings is what ultimately matters – for the industry and for the country in terms of foreign exchange, employment and investment. tourism earnings have largely been flat since 2004. in 2008, we expect a marginal improvement over 2006 earnings levels, a 6. 7 percent rise in 2009 and a 14. 6 increase in 2010. thereafter we are hopeful that the tourism earnings will reach and surpass the $ 1 billion mark. • gross foreign exchange earners in 2008 : tourism is the major source of foreign exchange for fiji forming around 23 percent of total foreign exchange receipts in gross terms. • occupancy : there has been a huge level of investment into the hotel industry in the last few years where we have seen new hotels, renovations / extension of existing ones and an expansion of services provided ( weddings / spas / conventions ). the increase in hotels and rooms have seen occupancy levels fall. 50 percent of tourism capacity in terms of room days is unutilised. the challenge for the industry and for the country is to fill these rooms. • employment : the hotels & restaurants sector directly employed around 9, 000 workers in 2007. using the hotels employment multiplier of 2. 6, the total employment generated by the tourism industry is approximately 23, 400 workers. the employment multiplier was sourced from a 1990 study by the tourism council of the south pacific ( tcsp ). foreign exchange receipts include exports of good ( fob ) and services, income and

. in contrast, the transitory scenario would have assumed that inflation was purely supply - driven and the inflation pressures were temporary, and therefore, the central bank would be committed to supporting an economy still recovering from covid. this framework might have helped major central banks to better manage the constraints on monetary policy during the recent transition from a low - to highinflation environment. controversies in the transition to scenarios - based cfg despite its attractiveness, there are also considerable objections to applying scenariosbased conventional forward guidance to emerging markets. first, monetary policies in emerging market and small open economies are heavily affected by policies in advanced economies. they may have improved their independence from the government, but still cannot be independent from the fed. therefore, rather than solely relying on the interest rate, alternative policy tools, such as fx intervention, macroprudential tools, and sometimes capital flow management measures, need to be utilized as well. the integrated policy framework ( ipf ) by the imf and macro - financial stability frameworks ( mfsfs ) by the bis address this issue. in these circumstances, some believe that it is technically impossible to construct a simple baseline and reasonably small number of alternative scenarios. communication difficulties are another problem. the information contained in conventional forward guidance may be useful to market experts in that alternative scenarios can guide them when the realized state of the economy deviates from the baseline. however, the realization of an alternative scenario could be interpreted differently by the general public, as perhaps that the central bank is an incompetent forecaster. a recent bank of korea policy decision is a good example that illustrates these controversies. in july, the bok raised its policy rate by 50 bps for the first time in its history. given that market participants already anticipated a 50 - bp rate hike, forward guidance on the future policy path, rather than the current interest rate hike, became even more important. after debating the aforementioned pros and cons, a compromise approach was taken. in the official statement, we only included qualitative remarks such as “ the board sees continued rate hikes as warranted. ” then, we provided more detailed forward guidance during the press conference, such as saying that “ gradual, 25 - basis - point increases will be appropriate for some time as long as inflation paths remain as currently presumed. ” this was intended to give us more flexibility on the future policy path, while providing the minimal forward guidance that market experts would like. concluding remarks in conclusion