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Public Financing and Domestic Borrowing in Fiji: A Rising Concern in the Pandemic |
Preetika Singh and Gyaneshwar Rao
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Abstract:
A deficit budget is highly favored for economic progress thus, many at times the consequences of funding the deficits are ignored. Fiji government's budget shortfall is mostly sourced by domestic borrowing. Furthermore, Non-Banking Financial Institutions dominate domestic debt markets. This study validates domestic debts as statistically significant. However, in this pandemic exhausting domestic borrowing will be a challenge given the adverse outcomes related to slowdown in economic activities. Policy makers will need to deliberate on tradeoff between internal and external borrowing while dwelling on the requirements of the new normal.
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