The Governor of the Reserve Bank of Fiji has announced that Fiji's economy is now projected to contract by 0.3 percent in 2009 compared to the 2.4 percent growth announced in November last year.

Savenaca Narube said Fiji's economy has been severely impacted by flash floods earlier this year and by a deteriorating global economy.

The major sectors that are affected are tourism, sugar and other agricultural production.

Narube said this has led to the decline in wholesale and retail trade, hotels and restaurants, manufacturing, agriculture, forestry and fishing sector.

There is also a decline projected in the finance, insurance, real estate and business service sectors.

According to the Governor, with falling international demand, exports are projected to decline by 12.2 percent in 2009 with all export sectors expected to be affected.

Fortunately, driven by the lower oil prices, imports are also expected to decline by 10.6 percent.

Official foreign reserves at the end of February were $674 million, equivalent to around 2.7 months of imports of goods.