Financial conditions in Fiji continue to support growth, according to the Reserve Bank of Fiji’s assessment of the Overnight Policy Rate for August. The RBF highlighted that strong banking system liquidity, which stood at $2.2 billion as of August 28, combined with near-historic low lending rates, are contributing factors.
Commercial bank lending has been gaining momentum, with private sector credit increasing by 11.6 percent in July. The RBF noted a positive trend in domestic economic activity, particularly with visitor arrivals exceeding expectations. In July alone, Fiji welcomed 98,332 visitors, marking a record for that month and bringing the total for the year to 545,487 visitors, a 6.7 percent increase compared to the same period in 2023.
Overall, consumption remains robust, fueled by strong tourism, higher income levels, and significant inward remittances. Recent indicators also suggest a gradual rise in investment activity. The RBF anticipates that as the effects of the 2023 VAT rate increase diminish, inflation should ease to approximately 4.0 percent to 5.0 percent by the end of the year.