Fiji

FIJI Post-Disaster Needs Assessment
Per capita production losses, F$/person
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
Bua
Lomaiviti
Ra
Cakaudrove
Lau
0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
Average Annual Household Income, F$
Figure 6: Relationship between Per Capita Production Losses and Average Annual Household Income Arising from TC
Winston
Source: Estimations by Assessment Team.
Note: The sizes of the balls in the above figure represent the ratio between production losses and household income.
Summary of Economic and Social Impact
Summary of Economic Impact
The macroeconomic impact of TC Winston in 2016 is expected to be substantial given the significant damage incurred,
particularly to key sectors, such as housing, transport, manufacturing, agriculture, electricity and communications. The
losses resulting from TC Winston are estimated to reduce economic growth by 2.5 percent relative to the 2016 pre-cyclone
forecast, bringing the growth rate down from 3.8 percent to 1.3 percent. However, taking into account the possible effect
of recovery and reconstruction activities, assuming they start during 2016, the GDP growth rate is expected to be 2.4
percent, which is a decrease of 1.4 percent compared to the pre-cyclone baseline estimate. This revised growth also
reflects the expected impact of TC Zena, which passed southeast of Fiji only six weeks after TC Winston, causing torrential
rain and major flooding.
The impact of TC Winston on the performance of the balance-of-payments in 2016 will be quite substantial, due to exports
declining relative to pre-cyclone forecasted levels. Total exports are now projected to decline by 1.2 percent in 2016
compared to over 17 percent growth anticipated prior to the cyclone. Imports will be higher than previously expected
with an inflow of machinery, equipment and materials for reconstruction and replacement of infrastructure in the housing,
education, telecommunication and transport sectors. Food imports are also expected to increase due to the loss of locally
grown produce. These impacts will raise the trade in goods deficit by 18.5 percent this year, which, as a percent of GDP,
is now estimated to increase from 27.3 percent to 32.4 percent in 2016. The cyclone had minimal impact on the tourism
sector, which is expected to fully recover during 2016. Aid in-kind and cash grants have risen following the cyclone and
reconstruction financing is expected to result in higher inflows during 2016 and beyond. Overall, Fiji’s Balance of Payments
Current Account deficit for 2016 is estimated to increase by 8.9 percent, driven by lower export earnings and higher import
payments. This will raise the Current Account deficit to 12.9 percent of GDP (at market price) in 2016.
There will be a number of negative impacts on the government’s fiscal balance. Government expenditure on disaster relief
and early recovery activities are being funded through the reprioritization of line ministry budgets. Notable reallocations
include top ups for social welfare programmes and food ration distribution. In addition, around F$70 million will be set
aside for the upcoming residential rehabilitation and assistance programme (Help for Homes), and the diversion of funds
into relief, recovery and reconstruction will reduce funds available for the government’s existing development programmes.
Large additional expenditures are expected to be required once the reconstruction and recovery programmes are fully
specified. In terms of impacts on revenue, value added tax (VAT) collections are expected to decline by about F$61.9 million
during 2016 and there will be reductions in the Service Turnover Tax as a result of losses in the tourism sector.
Tropical Cyclone Winston, February 20, 2016
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