The effects of weaker global growth now pose downside risks to Fiji's economic growth outlook.
As the 2009 National Budget is set to be announced by the interim Prime Minister Commodore Bainimarama next Friday, the Reserve Bank of Fiji (RBF) said the global financial crisis and economic slowdown in our major trading partner countries is expected to have some dampening effect on the domestic economy.
The RBF said it is likely that visitor arrivals from our major source markets and demand for our exports may soften.
And there are more worrying signs as inward personal remittances will continue its downward trend as the crisis will adversely affect the labour market in these countries.
However, there is some good news for now as growth in our Import Bill is expected to slow down due to lower oil and commodity prices.
So far this year, the Reserve Bank said performances in key sectors have been varied.
Relatively strong growth has been recorded in visitor arrivals, gold production and mineral water output while the cane and sugar industries as well as the building and construction sectors have registered notable declines.
Most other sectors show little change.
The RBF said partial indicators for consumer demand are consistent with weak consumption activity.
The Reserve Bank also said labour market conditions remained weak in the review period. While approximately 7,100 employees were registered as new taxpayers upto September, this is 9.6 percent lower than the same period last year.
It is likely that the bulk of new taxpayers are replacing old or migrating workers rather than filling new positions. This is also supported by Pay As You Earn or PAYE collections which has declined so far this year.
However, the Reserve Bank said looking ahead, employment prospects are positive as reflected in the growing demand for recruitment intentions based on the latest Fiji Employers Federation Expectations Survey.
