to grow by 3. 1 percent. while growth for 2014 has also been downgraded, the good thing is that it is expected to higher than this year, at 3. 8 percent. bis central bankers ’ speeches fiji ’ s major trading partners, those economies with which we have important trade and investment links, have also not been spared and are facing numerous challenges of their own. the us economy is quite fragile after facing fiscal challenges and poor confidence. across the atlantic, the euro zone is mired in a prolonged recession and is facing record high unemployment. we are talking here of numbers in excess of 25 percent, or 1 in 4 people without a job. it is worse for the youth of these countries where up to 2 out of every 3 young people between the ages of 18 to 25 years, or 66 percent, are without jobs. many member countries have needed bailouts and are struggling to contain debt in the midst of a growing backlash from the public over harsh austerity measures which are part of deals struck by their respective governments for the bailouts. closer to home, economic activity in australia and new zealand remains patchy as growth remains uneven across sectors. however, both these economies are expected to have growth in excess of 2. 5 percent. the reserve bank of australia lowered its policy interest rate this month to a new record low to assist growth. in japan, there are spurts of optimism following massive fiscal and monetary stimulus, although it is yet to be seen how this can spur sustained growth in light of the weak demand across the globe. as i alluded to earlier, the emerging economies, the main source of global growth in recent times, are losing steam as well. china ’ s heavy reliance on investment and credit to spur growth in the past decade has resulted in vulnerabilities in the financial sector, government finances and real estate, while india faces its own challenges, including high inflation. these, coupled with a slowing global demand have brought down their growth prospects to the lowest in a decade. the fijian economy let me now turn to the fijian economy. in spite of my earlier comment, we have been fortunate in that our economy has so far been somewhat shielded from the global slowdown. our gdp expanded by 2. 2 percent last year following a 1. 9 percent expansion in 2011. growth prospects are expected to improve further to around 3. 2 percent this year and, with the exception of the mining & quarrying sector, all sectors will contribute to this

which can be streamlined and better managed by the relevant bis central bankers ’ speeches agencies. improving our ease of doing business will not only encourage local investors but also help attract the much desired foreign investors. we also must be mindful that consumption and investment led growth cannot be sustained for too long as they have heavy import content. this can be counterproductive if not matched by gains in our export and service sectors and negatively impact our fragile external balance. our export sector is small and highly vulnerable to changes in global demand and domestic supply constraints and shocks. in this regard, policies aimed at export diversification and promotion and import substitution remain as paramount as they were before. restoring the sugar industry back to its glory is also necessary given its importance as a major foreign exchange earner and the indirect spin - off activities it creates in the western and northern divisions. the government ’ s grants to the sugar mills to improve efficiency and the sugar action group ’ s strategies to improve cane yield and farm productivity are welcomed. while the government ’ s commitment to revitalizing the sugar industry is encouraging, it is imperative that these plans are brought to fruition sooner rather than later, so that the industry is able to sustain itself without grants, subsidies or preferential prices. however, it is well understood this can be a daunting and difficult task and cannot be achieved overnight. ladies and gentlemen, poor and inadequate infrastructure has been for many years, not only a deterrent to growth, but also a frustrating experience for all fijians. improved infrastructure can go a long way towards boosting agriculture as well as boosting the economies in our rural and maritime areas. again the government ’ s planned reforms in road and port maintenance and upgrade is welcomed and we hope the constraints of poor infrastructure no longer remain constraints moving ahead. i note that the $ 420 million earmarked for roads and other infrastructure projects this year appears to have already generated a lot of confidence and activity in the business community, not the least being the large investments in new trucks, utility vans and buses. keeping government debt low is another challenge, not only for fiji, but the world over. public debt has become a topical issue these days given the awful experience in europe which has required many countries to seek bailouts and adopt harsh and extremely unpopular austerity measures. small developing economies like fiji are even more disadvantaged as we cannot sustain high public debt for too long due to limited and volatile revenue streams of government and the need to maintain adequate fiscal buffers to