Fiji’s economy is expected to grow for the fourth consecutive year as the Reserve Bank of Fiji (RBF) has decided to maintain the Overnight Policy Rate at a steady 0.25 percent. This decision reflects the central bank’s commitment to its dual monetary policy objectives—controlling inflation and maintaining sufficient foreign reserves, both of which are currently in stable positions.
According to RBF Governor Ariff Ali, while the domestic economic environment seems robust, external factors are emerging as potential risks. Increased global trade tensions and inflation could hinder growth. The RBF is closely monitoring these variables and plans to reassess its monetary stance at its next board meeting scheduled for April 24, 2025.
Recent data indicates that tourism, one of Fiji’s key economic drivers, saw a decline in visitor arrivals by 3.8 percent in the first two months of the year, largely attributed to lower numbers from Australia and New Zealand. However, resource-based sectors are performing well, contributing to domestic growth. The RBF noted a surge in new consumption-related loans, high remittances, and increased incomes, which positively influenced domestic VAT collections.
Additionally, the annual inflation rate eased to 1.4 percent as of February, while foreign reserves remain healthy at approximately $3.5 billion—enough to cover 5.6 months of imports. This is an encouraging sign of economic resilience.
Investment indicators, including significant new loans and the issuance of building permits, hint at improving activity levels in the economy. The RBF’s ongoing commitment to stable monetary policy aims to foster growth while navigating global uncertainties, which is a hopeful sign for the future economic outlook of Fiji.
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