Tue, 05 Dec 2023

ADB advises against across-the-board subsidies

29 Sep 2023, 23:30 GMT+10

SUVA, Sept. 29 (Xinhua) -- Asian Development Bank Chief Economist Albert Park emphasizes the need to pay special attention to specific commodities that can disproportionately impact vulnerable populations.

Park said understanding the price points affecting these groups is crucial and the significant role played by energy and food prices in inflation trends in developing countries.

Regarding government intervention, Park is advising against across-the-board subsidies, citing their high cost and lack of targeted impact, reported Fiji Broadcasting Corporation news website on Friday.

Such subsidies often benefit both the wealthy and the poor, making them less efficient in addressing the needs of the most vulnerable, he said.

So it's better to really monitor who were hurt by price changes and then create targeted kind of support programs that really reach the people who can not manage these issues on their own, he said.

In Fiji, inflation rates were projected at 3 percent for the current year, down from an earlier estimate of 4.2 percent, and expected to remain at 3 percent next year, down from 3.5 percent, according to Park.

However, in its recent economic review, the Reserve Bank of Fiji said the inflation outlook for year-end is around 6 percent.

Moreover, the Fijian economy grew by 20 percent in 2022. Reserve Bank of Fiji Governor Ariff Ali said while the economy is on track for an 8-percent growth this year, sectoral performances remain weak due to industry-specific issues.

However, he said investment activity continued to see stable recovery, driven by higher cement sales and strong demand for credit in the real estate.

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