Fiji's credit rating negative: Moody's

[posted 13 May 2011,1515]

Poor economic growth and weak rule of law have been cited by Moody's Investors Service as reasons for Fiji's sovereign credit rating remaining negative.

Fiji's local and foreign currency rating at B1 is four notches below investment grade and is categorised as highly speculative, says Moody's in its annual report just published.

The rating is based on assessment of Fiji's "low economic resilience and low financial robustness". Moody's says that poor growth over the past decade has eroded government's finances and that the prospects for future growth is further dampened by a lack of investor spending.

"Real GDP contracted by 0.3% on average between 2006 and 2010 which was the lowest rate of economic growth among its peers."

The report observes that the restoration of an elected government that would bolster international sentiment and investment spending may see a more favourable growth outcome.

MP Chaudhry