The Reserve Bank of Fiji has reported that financial conditions in the country remain favorable for growth, according to its monthly Overnight Policy Rate assessment for August. The central bank noted that the banking system’s liquidity reached $2.2 billion as of August 28, along with lending rates that are close to historical lows.
The RBF highlighted that commercial bank lending is on the rise, leading to an 11.6 percent increase in private sector credit in July. Signs of economic momentum are also evident, particularly with visitor numbers exceeding expectations.
In July alone, Fiji welcomed 98,332 visitors, marking a record for the month and bringing the total for the year to 545,487, which is 6.7 percent higher compared to the same period in 2023.
On the demand side, consumption remains strong due to robust tourism, rising income levels, and incoming remittances. Additionally, recent indicators suggest a gradual increase in investment activity.
The Reserve Bank anticipates that as the impact of the 2023 VAT increase diminishes, inflation is likely to stabilize between 4.0 percent and 5.0 percent by the end of the year.