59 60 Managing macroeconomic policies for sustainable growth 4.2 PERFORMANCE OF THE FIJI ECONOMY The performance of the Fiji economy can be described as sluggish and unstable and in general exhibits a declining trend as seen in Table 4.1. The economy’s real GDP grew annually by 4.12% in the period 1971–86 but declined in 1987 due to the coups in May and September of that year. The currency was devalued in 1987 and 1988 by a total of 35% to stabilise the economy after the coup to stop capital flight, to dampen import demand and to encourage exports and create employment. There was, however, a recovery in the 1991–99 period and inward private investment continued to be attracted primarily to the garment and tourism industries but the economy was still hindered by weak private investment and an increase in emigration. Table 4.1 Selected macroeconomic indicators for Fiji (%) Indicator Real GDP Growth Inflation Rate Unemployment Rate 1971– 86 4.12 3.53 8.9 1987– 90 –0.94 6.56 7.5 1991– 99 2.76 3.7 6.4 2000 –1.66 3.0 7.6 2001– 05 2.45 2.82 8.2 2006– 09 –0.23 5.08 8.1 Note: Above values are averaged over the years using 1990 as base year. Source: Reserve Bank of Fiji (various years). The May 2000 putsch also adversely affected the economy with a –1.7% growth but the economy recovered more quickly this time around to register an annual average growth rate of 2.45% over 2001–05. The December coup is clearly a disruption that Fiji...
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