The Reserve Bank of Fiji (RBF) has announced that annual headline inflation in Fiji significantly slowed to 1.3 percent in December 2024, the lowest rate recorded at year-end since 2021. This notable decline is attributed to the reducing effects of a Value Added Tax (VAT) increase implemented in 2023. Comparatively, inflation was at 5.1 percent in December 2023 and peaked at 7.1 percent in April 2024.

The Bank’s report emphasized that the easing of prices is largely due to the fading impact of the VAT hike along with the removal of a 3.0 percent fiscal duty on raw materials that came into effect in the current fiscal year. Additionally, there was a noteworthy slowdown in food price increases, marking the smallest rise in the sector observed over nearly four years.

In terms of economic performance, the tourism sector continues to thrive, with 899,098 visitors arriving in Fiji in the year leading up to November 2024, showcasing a 6.2 percent increase from the previous year. Key markets contributing to this growth include Australia, New Zealand, and the United States.

Other sectors also displayed positive developments: electricity generation rose by 11.1 percent with over half of the energy produced from renewable sources, and gold production surged by 38 percent, primarily due to increased output from the Tuvatu Gold mine. However, the timber industry faced some challenges, as mahogany production fell by 13 percent, and mineral water production continued on a downward trajectory, also declining by 13 percent.

Overall, the economic indicators suggest promising signs for Fiji’s recovery and growth prospects moving forward. As inflation rates decrease and the tourism industry remains robust, there is an optimistic outlook for sustained economic stability in Fiji. This progress is encouraging for consumers and businesses alike, signaling a potential period of improving financial conditions across various sectors.

In summary, Fiji’s economy is showing signs of resilience with slowing inflation rates, bolstered by strong tourism performance and positive sectoral growth, marking an encouraging pathway for the nation’s economic future.