The Reserve Bank of Fiji (RBF) has expressed concerns regarding a potential slowdown in global economic growth over the next two years. In its recent Economic Review, the central bank revised its growth forecast for Fiji to 2.8 percent for the current year, reflecting a decline of 0.5 percentage points. Looking ahead to 2026, the expected growth has been adjusted to 3.0 percent, down by 0.3 points from previous estimates.
The RBF attributed this downgrade to escalating trade tensions, particularly between the United States and China, which are influencing the economic outlook for Fiji’s trading partners. The bank noted that rising tariffs are likely to inflate prices, predicting a 0.4 percentage point rise in inflation in advanced economies by 2025, while developing countries may see a slight decrease in inflation by 0.1 points.
Commodity price movements have also been varied; Brent crude oil prices dropped sharply by 15.5 percent in April, reaching a four-year low due to concerns over global growth and diminished energy demand. Conversely, global food prices have increased for the third consecutive month, driven by strong demand for cereals, dairy, and meat products, indicating varying impacts across sectors.
Recent similar reports have shown that Fiji’s own inflation rates had risen from 5.8 percent to 6.7 percent within a month, largely attributed to higher costs in essential categories. While the RBF maintains a cautious stance, there are indications of strong consumer demand with a continual rise in tourism—a sector heavily relied upon by Fiji. Visitor arrivals increased significantly earlier this year, suggesting resilience amidst broader economic challenges.
In summary, while the outlook presents notable concerns about slowdowns and inflationary pressures, the ongoing strength of tourism and proactive fiscal initiatives could support Fiji’s economic stability and growth potential in the coming years, providing a glimmer of optimism in these uncertain times.
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