S&P ups Fiji’s outlook to stable from negative

SUVA: Standard & Poor’s Ratings Services said it has lifted its outlook on Fiji to stable from negative in response to a stabilisation of near-term external pressures, Forbes reports.
It said Fiji’s key tourism industry had fundamentally sound prospects, with a recovery expected in the sector particularly if the interim government adopts a credible road map for a return to democracy and relations with New Zealand and Australia improve.
The political turmoil in the wake of last December’s coup, which occurred when Fiji’s external position was already weak, was expected to lead to an overall contraction in growth of 3.1% this year, compared to a 3.6% growth last year, S&P said.
It added that despite the expected recovery in tourism, political turmoil, low foreign exchange reserves, and a narrowly based economy with poor medium-term growth prospects continue to weigh on the sovereign’s credit strength.
A lack of economic diversification and deficiencies in available data also constrain the ratings.
S&P also affirmed its ‘B’ long-term foreign currency, ‘B+’ long-term local currency credit ratings, and ‘B’ short-term ratings on Fiji.– PNS