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The Reserve Bank of Fiji (RBF) is optimistic that the inflation rate will drop to five percent by the end of the year as opposed to comments by a Fiji economist who predicts inflation to be doubled by the end of the year.
The deputy governor of RBF, Barry Whiteside, in response to comments by Professor Biman Prasad that the country will end up with higher levels of inflation in 2010 as a result of the devaluation agreed to his comments.
“However, the statement is true to the extent that devaluation would work through and peak by April this year,” he said.
Whiteside highlighted, at the end of April this year, the inflation rate was 10.5 percent while the rate as of June was 5.5 percent.
“Our forecast for the year end is five percent is which lower than last year’s inflation rate,” he added.
These comments were made at the Fiji Economy Update 2010 yesterday.
Prasad had also pointed out he considered the decision to reduce the deficit immediately after the 2006 coup by the then Minister for Finance was a wrong and ill-conceived policy stance.
“The minister actually went ahead and reduced the expanding of the economy and by the time it was corrected in 2009 by the new Finance Minister, Commodore Voreqe Bainimarama, it was already too late,” he said.
“We has already entered the global economic crisis having to deal with a declining revenue situation and balancing out budgets and balancing out deficits,” he said.
By Rachna Lal
