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Friday, 22 August 2008

Fiji's post-coup economy shrinks

4/08/2008 12:58:00 PM.  | AAP
New figures show Fiji's economy contracted by 6.6 per cent the year after a military coup in the country, a result that's more than two per cent worse than expected.

The latest economic review by the Reserve Bank of Fiji updated the health of the nation's economy during the 2007 financial year, which corresponds with the calendar year.

On December 5, 2006, Fiji was plunged into crisis when military commander Frank Bainimarama seized power in a bloodless coup.

Since then there have been reports of a drop in business confidence and a 9.6 per cent fall in tourism takings.

The new figures show that during 2007, the economy contracted by 6.6 per cent, more than original figures which indicated it had only shrunk by 4.4 per cent.

"Stakeholder feedback indicates that business confidence remains depressed," the review showed.

Fiji's trade deficit also worsened cumulative to May this year, to around $789 million ($A556 million), compared to around $653 million ($A460 million) in the same period in 2007.

But there were some positive signs for Fiji's economy.

Imports of investment goods were up and the annual growth of credit for investment also had expanded.

"Anecdotal evidence showed that demand for labour remains positive so far this year, consistent with the economic recovery," the report said.

Fiji's interim finance minister Mahendra Chaudhry last week said the coup had saved the country from economic collapse.

He said there were 18,000 more people employed at the end of 2007, compared to 2006.

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