13 Nov 2013

Economics expert questions sustainability of Fiji budget

2:48 pm on 13 November 2013

A professor of economics in Fiji says the challenge for the country is spurring real growth in the economy for the long term.

Professor Biman Prasad of the University of the South Pacific says the 3.6 percent growth rate the government has projected for Fiji this year is largely consumer driven.

Professor Prasad says the budget for 2014 revealed last week continues the government's populist and expansionary fiscal policies of the last two years, with almost 300 million US dollars on education and 50 million on increased salaries for the civil service.

But he says the government will need to lay out very clearly its revenue forecast and what exactly it will get from the sale of government assets.

"The real question probably is not how they'll fund it in 2014 but how they will be able to sustain the expenditure beyond 2014. Of course that is based on the fact that they're expecting high levels of economic growth but these are unknowns that would have to be explained very carefully."

Professor Prasad says the eight million US dollars towards elections preparation is an indication of the government's firm commitment to hold elections.