NFP’s Prof Biman queries ‘how RBF got it wrong’

National Federation Party leader Professor Biman Prasad. Picture: FT FILE

How did the Reserve Bank of Fiji get it so wrong? National Federation Party leader Prof Biman Prasad posed this question while referring to the RBF’s revised economic growth rate for 2019 from a 0.5 per cent growth to a 1.3 per cent contraction.

“In other words, the Fiji economy did not grow in 2019,” he said. “It got smaller.

This was all before anybody even heard the word ‘coronavirus’, so Covid-19 is not an excuse.

“Everybody knew the economy was down. The Government knew it because its revenue collections were one-quarter off budget.

“Every person in business knew it from their sales. Even the Reserve Bank’s own investor surveys were showing low confidence in the Fiji economy.

“So the question is — how did the Reserve Bank get it so wrong?

“And why has it taken until July 2020 for the Reserve Bank to admit that in 2019 the economy went down, not up?”

Prof Prasad said the admission from the RBF raised serious questions about the reliability and objectivity of its economic information.

He said businesses and investors needed accurate information to plan for the future and manage their costs.

“If we cannot rely on the Reserve Bank for accurate, objective and timely information, who can we rely on?

“It is too late now. “We have a new and bigger economic crisis to deal with.

“But the Reserve Bank’s reputation is damaged by this — just at a time when we need the best economic information available.”

In a statement on July 2, RBF governor Ariff Ali said the provisional GDP growth estimate for 2019 had been revised from a marginal 0.5 per cent growth to a 1.3 per cent contraction, in line with the synchronised global slowdown and weakness in domestic demand from the second half of last year.

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