However, these sizeable flow adjustments have not yet fully translated into improvements in the accumulated stock of imbalances – public debt ratios on the fiscal side, net international investment positions on the macroeconomic side – because of depressed nominal GDP growth. Most EU countries made significant progress towards further reducing budgetary imbalances in 2012, in an environment of weaker than expected output growth.
Having said this, it is noteworthy that Fiji’s financial system was largely insulated from the direct impact of the global crisis which began 3 years ago. However, the devastating economic fallout and implications of that event on both developed and developing countries has provided valuable lessons for small developing nations like ours.