14 Oct 2008

USP economics professor says financial crisis will take time to reach Pacific nations

11:05 am on 14 October 2008

A University of the South Pacific Associate professor of economics, Azmat Gani, says the impact of the current financial crisis is likely to hit Fiji and other Pacific States in coming months.

Dr Gani says he doesn't expect the crisis to have any direct effect on either the Fiji stock market or the availability of credit but that it will result in a drop off in tourists and a fall in remittances from Fijians overseas.

He says the Fiji economy has had excess liquidity in the last three to four years.

And that combined with the robustness of the mainly Australian owned banks that dominate the Fiji banking sector means Fiji is unlikely to experience any problems with the availability of capital.

Dr Gani says the delay in the impact of the crisis reaching Fiji has meant the Government has been able to virtually ignore it.

"But eventually the economy wide effect, the decline in economic activity in the US, and Australia and perhaps New Zealand will start hitting Fiji and that's when the awareness will probably come into effect."