Fiji’s balance of payments for the September quarter of this year reflects a significant shift, with a recorded deficit of $112.3 million on the current and capital account, a stark contrast to the surplus of $23.3 million noted during the same period last year. This downturn has been largely attributed to a surge in imports, particularly machinery and transport equipment. In tandem, the nation experienced decreases in exports, notably in food and live animals, as well as re-exports of mineral fuels and lubricants, alongside a decline in personal transfers received from abroad.
The financial account mirrored this trend, showing a deficit of $71.9 million, although this was an improvement from last year’s deficit of $92.5 million. This change is primarily due to lower loans and trade credits and advances paid out, coupled with an uptick in equity and investment fund shares received from overseas.
The Fiji Bureau of Statistics (FBoS), in their recently released report, noted that the current account balance indicated a net outflow of $113.6 million for the third quarter. FBoS chief executive Kemueli Naiqama pointed out that this net outflow showed a dramatic decrease of $136.1 million—representing a 604.9 percent decline—compared to the net outflow of $22.5 million recorded in the September quarter of 2024.
Within the current account, the balance on goods and services registered a deficit of $175.8 million. While the balance on primary income saw an improved deficit of $151.8 million—thanks to an increase in investment income from abroad—the balance on secondary income reported a decreased surplus of $214 million, attributed to a drop in personal transfers from overseas.
On a brighter note, the capital account demonstrated a net inflow of $1.3 million, which signifies a 62.5 percent increase compared to the previous year, where it stood at $0.8 million. Naiqama highlighted that the financial account balance indicated a net borrowing of $71.9 million, composed of net outflows of $24.3 million in equity and $47.6 million in debt for the September quarter.
In the realm of direct investment, a net outflow of $87.4 million was recorded due to a decline in investment income from abroad. However, portfolio investment saw a substantial net inflow of $65.1 million thanks to increasing equity and investment fund shares received from overseas, signaling potential growth in international investor confidence in Fiji. Despite some challenges, the improvement in certain financial metrics and capital inflow indicates resilience and the possibility of recovery in Fiji’s economic landscape moving forward.
Leave a comment