Fiji's Standard & Poor's Remains Stable - Chaudhry
Statement From Finance Minister: Fiji's Ratings Remain Stable - Standard & Poor's (S&P) Affirms Fiji's Ratings, With The Outlook Remaining Stable
On July 16, 2008 Standard & Poor's Rating Services affirmed its foreign currency ratings on Fiji, keeping its 'B' long-term foreign currency and 'B+' long-term local currency credit ratings. S&P also affirmed the 'B' short-term ratings on Fiji, stating the outlook remains stable.
The Minister of Finance, National Planning, Sugar Industry and Public Utilities, Mr Mahendra Pal Chaudhry said that this latest ratings show that the economy is on the mend. The aim now would be to help raise the ratings, as more positive signs develop and the economic turnaround forecast for this year becomes more evident.
Mr Chaudhary further stated that S&P's ratings decision largely reflects the stabilization in Fiji's external position, highlighting that foreign reserves at the end of May 2008 stood at $877 million, sufficient to cover 3.8 months of imports cover. This should further improve with sugar exports beginning in July.
S&P has stated that underpinning their analysis is a belief that the official estimates of foreign reserves are robust and that their estimate of a current account deficit of 21% of GDP, is much higher than the real picture because of a large positive errors & omissions.
Mr. Chaudhry agreed that the current account deficit figures were constrained by recording deficiencies and were actually substantially lower due to very high unrecorded inflows, which he says is likely due to high unrecorded remittances. He emphasized that, going forward, foreign reserves are expected to remain at adequate levels, buffered to some extent by good tourist arrival numbers and increased exports.
In the first half of this year tourist arrivals were 13 percent higher than the comparable period last year and exports were up 33% compared to same period last year.
Minister of Finance, National Planning, Sugar Industry
and Public Utilities
18 July 2008