Westpac has revised its projection for Fiji’s economic growth to 3.0 percent in 2024, up from an earlier estimate of 2.5 percent, citing stronger-than-expected performance in key areas.
In its quarterly economic update, Westpac noted that despite challenges such as rising prices and sluggish growth in partner countries, Fiji’s economy has been supported by a thriving tourism sector, increased industrial activity, and a rebound in consumer spending, even with ongoing labor issues.
The report highlighted that the tourism industry continues to expand healthily despite slow growth in its traditional markets, with visitor arrivals increasing by 6.9 percent in the first three quarters of 2024. The year is expected to conclude with approximately 990,000 visitors, nearing the million mark. A new 13-hour non-stop flight between Fiji and Dallas set to commence in December is anticipated to present new opportunities for the tourism sector, potentially adding around 1,000 passengers weekly. Fiji Airways is also exploring new routes for further expansion.
However, consumers have faced challenges due to high prices, with average annual inflation reaching 5.3 percent in August. This inflation is driven mainly by increases in food and non-alcoholic beverages. Westpac expects domestic inflation to decrease in line with falling inflation rates in advanced economies, although prices are likely to remain high by historical standards.
The government reported a lower net deficit of 3.4 percent for the fiscal year 2023-24, achieved through prudent spending, while the debt-to-GDP ratio stood at 78.3 percent in July 2024. The government successfully met its revenue collection targets last fiscal year and implemented controlled spending measures. The fiscal stimulus from the last budget aims to encourage consumption growth, with the private sector urged to lead investment growth.