global economy has managed to turn this situation around. the world economy is improving and according to the international monetary fund ( imf ), the global economy is expected to grow by 4. 2 percent this year, following a contraction of 0. 6 % in 2009. last year ’ s performance of the global economy is actually regarded as the worst since the great depression of the 1930s. on a positive note though, a further growth of 4. 3 percent is expected in 2011. ladies and gentlemen, except for australia, all our trading partner economies contracted last year as a result of the global financial crisis. this significantly affected our exports and tourism last year. however, the worst is over now and all of these countries are expected to post a modest growth this year and continue this into 2011. this is good news for fiji, as this means increased demand for our exports and tourism. in fact, we are already seeing the effects of these, especially in the tourism industry, where we see a strong recovery in visitor arrivals. amongst advanced countries, the us economy is doing better than europe and japan, while for emerging and developing economies, asia is driving the recovery. in particular, china and india recorded high growth rates in 2009 and are expected to record similar growth in 2010. as is the case in most developed and developing economies worldwide, it is the business / private sector that will drive these growth prospects. having said that, indigenous businesses play an important and crucial role in the development of their economies. all businesses, whether big or small, have a role to play in the development of the economy. before i return to this subject in more detail, let me share with you our expectations on the domestic economic outlook. economic conditions ladies and gentlemen, let me now touch on fiji ’ s current economic conditions and prospects. our economy has been contracting over the last 3 years. last year our economy contracted by 2. 2 percent. however, the economy is expected to regain some strength in 2010 and continue this performance into the next two years. for this year, we are expecting most sectors to show positive growth except for agriculture & forestry and health & social work sectors, which are projected to decline. the agriculture sector was badly hit by cyclone tomas, resulting in a downward revision of the overall growth rate for this year, which now stands at 1. 8 percent. looking ahead into the next two years, growth is also expected to be broad - based. apart from an expected decline in the building and construction sector, the

in each of their branches. we are delighted to note that all our commercial banks have moved to fulfill the requirement of this policy. some banks have ventured out and taken banking to rural communities in various parts of fiji. another bank is providing microfinance in urban centers ( a great example has been the micro - loans to suva ’ s wheel barrow boys, enabling them to make a start in business ). in addition, banks have conducted microfinance expos to create awareness and extend financial inclusion. we greatly welcome these efforts by banks and encourage them to maintain the momentum. the rbf has now been able to interface more closely with other development agencies and financial institutions in promoting microfinance schemes around the country. last month, we hosted the first ever rbf microfinance expo in ba. the event was well received by the community and we were fully supported by all the banks, ngos, mobile phone providers, non bank financial institutions, the national centre for small and medium enterprise development and other stakeholders. of course the micro entrepreneurs were also able to display and sell their wares. the expo provided the opportunity for the financial institutions and others to enlighten the public about their financial and microfinance services. the rbf will continue to take a lead where necessary to encourage micro finance activities and take the providers to the people. we plan to host a similar expo in suva during the upcoming hibiscus carnival in august and later on in the north. v. local advisory boards to help drive our initiatives, ladies and gentlemen, the reserve bank recently issued a guideline to banks on the establishment of a local advisory board within their fiji operations. these boards are aimed at assisting foreign - owned banks to better understand and align their strategies, not only to fiji ’ s regulatory and supervisory environment, but more importantly to the national development objectives, such as microfinance activities and the like. the local advisory boards in each bank will comprise local individuals who would bring unique local knowledge and skills to complement that of the expatriate senior executive management, to enable them to gain a heightened awareness of our environment from a fiji perspective. the local advisory boards will play an advisory role to the main board of each bank and membership must be approved by the rbf. at this point in time the banks have made good progress in putting their respective boards in place with members of 3 banks having already been assessed and approved. we are looking forward to their contribution to their banks and to our country ’