| Project Detail |
OBJECTIVE
The Program supports the Government of Fiji Supplementary COVID-19 Response Budget to mitigate the public health crisis and ensuing economic crisis.
DESCRIPTION
This Program is proposed under the COVID-19 Crisis Recovery Facility (the Facility) of the Bank and co-financed with the Asian Development Bank (ADB) as a policy-based loan under ADB’s Sustained Private Sector-Led Growth Reform Program (Subprogram 3). The Program supports the Government of Fiji (GOF) public finance for public health containment and treatment measures and a fiscal stimulus with a focus on social and economic protection.
With 67% of the gross domestic product (GDP) in the country coming from the service sector with tourism contributing up to 40%, the COVID-19 pandemic is bringing the country to a halt. The Fijian economy is expected to contract by 4.3% in 2020 following a growth of 0.5% the year before, and unemployment spiked from 5 to 30% in a single month. As the public health crisis continues, disruption of supply chains is affecting trade flows; public finance is impacted on an unprecedented scale with taxes collection expected to drop 34%, resulting in public debt topping 60% by July 2020 against a forecast of 47%; a loss of USD 740 million in annual revenues from tourism; and a national budget deficit over 440 million. Within a week after the confirmation of the first case in March 2020, GOF announced a COVID-19 Response Budget of USD 440 million, equivalent to 8.7% GDP. In cooperation with the Fiji National Provident Fund, GOF is providing financial relief to sustain livelihood and disposable income of Fijians impacted by the pandemic. In addition, GOF together with Fiji’s financial institutions, is supporting repayment relief, cash-flow and debt restructuring for businesses, especially SMEs reeling from the economic slowdown. |
