Fiji’s banking system is currently experiencing significant liquidity, with a surplus of $2.4 billion as reported by the Reserve Bank of Fiji (RBF) in its December economic review. This robust liquidity continues to support historically low lending rates, which stood at 4.59% for loans and 1.67% for time deposits in November.

While the lending rates remain low, there has been a slight increase in time deposit rates, attributed to the implementation of Basel III requirements aimed at strengthening risk management in the banking sector. The RBF notes that the financial landscape in Fiji is favorable for economic growth, with broad money expanding by 8.4% annually and a notable rise in private sector credit, which grew by 11.4%.

Lending to businesses rose by 10.9%, and household credit saw a remarkable increase of 13.3%. Such figures indicate a healthy confidence within the private sector. Consumption activities have also demonstrated strong growth, with vehicle registrations increasing by 18.4% and new consumption lending, particularly in sectors like wholesale, retail, hotels, and restaurants, surging by 33.8% to reach $1.7 billion.

On the investment side, while new lending for investment purposes rose by 25.9%, challenges remain evident. The number of building permits issued decreased by 35.9%, although the overall value of these permits surged by 97.7%, reflecting escalating construction costs and a shortage of skilled labor.

On a hopeful note, despite some challenges in the investment sector, the financial data suggest that Fiji’s economy is resilient and poised for further growth. The expectations of increased private sector activity could pave the way for sustainable economic development in the near future, encouraging a cautiously optimistic outlook for 2024 and beyond.