Fiji’s economy is currently experiencing a phase of moderation following an exceptionally vigorous recovery from the pandemic, according to the recent Westpac Wave Fiji Economic Update. After remarkable growth of 17.7 percent in 2022 and 9.4 percent in 2023, the economic expansion is expected to slow down to 3.5 percent in 2024, with a further forecast of 3.0 percent for 2025.
The report indicates that the medium-term outlook suggests a stabilization of growth at approximately 3.3 to 3.4 percent, which aligns closely with Fiji’s historical growth average. This transition signifies a move away from recovery-driven growth towards a more sustainable economic path, bolstered by key sectors such as tourism, remittances, and domestic consumption.
Significant structural changes have emerged following the recent GDP rebasing to 2019 levels. Agriculture’s share of the economy has risen from 6.5 to 11.3 percent, while net tax contributions have decreased from 21.3 to 15.1 percent. Noteworthy gains have been observed in wholesale and retail trade, accommodation, and construction, all of which reflect resilient consumer demand and a robust rebound in tourism.
However, the outlook for 2025 presents some challenges, as a slowdown in visitor arrivals and a downward revision in remittance growth—expected to drop from 10 percent to 5 percent—have tempered forecasts. Despite promising tourist numbers in August, there has been a decline in visitor arrivals in September, a trend likely to persist through the remainder of the year.
Inflation is projected to fall into negative territory, averaging –1.3 percent in 2025, largely driven by decreasing food and transportation costs. Inflation is anticipated to rebound into positive territory by 2026, gradually increasing to between 2.5 to 2.8 percent.
Westpac recognizes that substantial investments in infrastructure will be vital for medium-term growth. Energy Fiji Limited is set to initiate nearly $2 billion in renewable energy projects over the next five years, complemented by large-scale hotel developments such as Tabua Tower in Suva and Koro Fiji in Nadi, which are expected to enhance tourism and construction activities.
Overall, Westpac describes Fiji’s economic outlook as one infused with “cautious optimism.” Although challenges persist due to global uncertainties and structural issues, the underlying strength of key sectors and ongoing investments suggest a path towards sustainable growth. The resilience shown by various facets of the Fijian economy can stand it in good stead as it navigates these complexities, fostering hope for future stability and expansion.
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