tourism industry is expected to lead the growth assisted by some growth in agriculture. a growth rate of around 1. 7 and 1. 9 percent is expected for 2011 and 2012, respectively. while we are encouraged by the turnaround in the economy, we still have a number of fundamental issues in the economy which if not fixed will not allow us to fully realise our growth potential. we have said on so many occasions in the past that our external position, or fiji ’ s balance of payments ( bop ), remains vulnerable. the poor performance of our exports sector, coupled with our ever growing need for imports, continues to produce a widening trade and current account deficit. as long as we have a current account deficit, it will continue to put pressure on fiji ’ s foreign reserves. the challenge remains in raising exports and minimising imports to help reduce these imbalances and ease pressure on foreign reserves. unless we bring the current account deficit to below 5 percent of gdp, our macroeconomic policies will need to remain relatively tight. in light of this, government will have to consolidate its fiscal position by aiming for a reduced fiscal budget. this is expected to be supported by relatively tight monetary conditions. now what does this mean for fijian businesses? in the short - term, business conditions in fiji may not be easy. a tight fiscal policy can mean fewer tax breaks and handouts to businesses. tight monetary policies can mean that loans will be more expensive. therefore, businesses should brace themselves to survive against challenges during these times. so, how do you manage in such an environment? i do not think i can give you any serious advice in this regard. but, i suppose i can make some general comments here. businesses should consider adjustments in their operations. you need to work smarter so that the limited resources you have gives you the maximum returns. you can consider product diversification – look for new and perhaps, niche, business opportunities. consider moving up the value chain by adding value to your current products. if you are currently providing tours for tourists, explore going into budget accommodation. if you are producing timber, consider converting them into furniture or other finished products. if the local market is saturated, consider exporting your goods and services. in addition to these, businesses should also consider staff capacity building at the various training institutions we have, tpaf for instance, to improve productivity and dynamism of your workforce. most importantly, as i mentioned before, an important rule is that businesses operate according to

claudia buch : economic challenges facing europe and the world policy priorities of the italian g7 presidency and german g20 presidency in 2017 statement by prof claudia buch, deputy president of the deutsche bundesbank, at the panel discussion with claudia buch and luigi federico signorini ( deputy governor of the bank of italy ), collegio carlo alberto, turin, 19 december 2016. * * * 1. challenges in the year 2016 we have witnessed important political events – some of them with unexpected outcomes and market reactions. financial markets recovered rather quickly from the brexit vote in june ; they first plunged and then went up after the us presidential election in november ; markets did not react much to this month ’ s referendum about constitutional reform in italy. post - crisis financial regulatory reforms sought to make the financial system more resilient against shocks. market responses to the brexit vote showed the importance of buffers in the system. market participants built up liquidity buffers before the referendum, and the depreciation of the british pound cushioned some of the adjustment. but the extent to which we have already seen the longer - term stock adjustment, the revaluation of assets, and the full response of markets to these events remains an open issue. recent political developments reflect global challenges that go much deeper. there is a great deal of uncertainty about how the rising tide of populism and protectionism will affect the global economy over the longer term. the benefits of globalization are being questioned. policymakers must therefore strike the right balance between sustaining integration, fostering economic prosperity, and addressing concerns about inequality. in europe, the 25th anniversary of the maastricht treaty and the upcoming 60th anniversary of the treaty of rome remind us of the many achievements of the european integration project. these include 70 years of peace and lasting democracy, freedom of movement, free trade of goods and services, and a rise in economic prosperity for many citizens. a precise measurement of the benefits of economic integration is hardly feasible, but a recent study estimates the gain in gdp per capita due to eu membership at approximately 12 % ( campos et al., 2014 ). 1 at the same time, economic integration has distributional consequences. not every individual, not every firm benefits from free trade and from increasing ( international ) competition. there is a need for appropriate policy responses such that both potential winners and losers continue to share a feeling of belonging together. many of the policy issues involved go well beyond the analytical contributions that