Fiji’s Economic Growth: Is a Cool Down Ahead or a Bright Future?

ANZ Bank’s international economists, Tom Kenny and Kishti Sen, have forecast a moderation in Fiji’s economic growth for 2024, attributing this to the expected cooling of the post-COVID tourism boom. In their recent Pacific Economic Outlook, they highlight that this slowdown is linked to capacity constraints and uncertainties in major markets. Despite these challenges, they reassured stakeholders by stating, “The short answer is: don’t worry.”

The economists project that consumer demand, a crucial element of Fiji’s GDP, will likely decelerate. However, there are emerging signs of renewed private sector investment, leading to an anticipated GDP growth of 2.8% in 2024 and 2.6% in 2025. They express optimism that from 2027 onwards, economic growth could gain momentum as international tourism continues to rebound, aided by the introduction of additional tourism capacity.

This outlook contrasts with the forecasts made by the Reserve Bank of Fiji (RBF), which is more optimistic, predicting a GDP growth of 3.8% in 2024 and 3.4% in 2025. The RBF attributes its positive projections to the services sector and growth in trading partner economies.

A key factor supporting this economic view is the resurgence in international visitor arrivals, returning to pre-pandemic figures, along with the significant contribution of remittances, often referred to as the “family bank,” which plays a vital role in sustaining consumer spending. Additionally, the construction sector is expected to rebound, with several major projects lined up for the latter half of the year, further enhancing the prospects for economic growth.

Although challenges may lie ahead, the continued recovery in sectors such as tourism, agriculture, and construction suggests a promising trajectory for Fiji’s economy. As the domestic market stabilizes, there is optimism for increased job creation and consumer spending power, driven by anticipated growth in private investment.

Thus, while the projections for growth may be conservative in the short term, the combination of sustained private investment, the recovery of tourism, and increased government expenditure paints a favorable outlook for Fiji’s economy in the coming years. There is hope that this momentum will lead to a resilient and thriving economic environment.