Answer to Question #208927 in Macroeconomics for Anisha Kumar

Question

Review the last year’s COVID19 supplementary budget of Fiji (available online) and discuss if the initiatives are adequate to mitigate the pandemic. Discuss the drawbacks, and explain how they may be improved. 

Answer 1

 COVID19 supplementary budget of Fiji ensured supplementary expenditure on public health, tax and tariff cuts, unemployment assistance and elimination of import duties. The initiatives were not adequate to mitigate the pandemic because there was also increased pressure on families' stress anxiety and reduced access to support services. The drawback is that the Fiji dollar depreciated, thereby making imports more expensive. However, this can be handled by raising interest rates to attract money flows.