A new bank assessment has turned optimistic regarding Fiji’s economic growth potential, offering a notably positive outlook for the near and medium term. Westpac, which previously downgraded its growth forecast for Fiji to 2.5 percent for 2024 due to factors such as high inflation, population decline, less productive primary sectors, decreasing construction activity, and regulatory challenges, is expected to revise this estimate upward in its upcoming quarterly report.
Westpac’s director and senior economist, Justin Smirk, attributed this potential change to “stronger than expected sentiments and growth in tourism.” During a recent media conference, he stated, “The tourism numbers are significantly better than we anticipated, indicating further growth in this sector.”
Smirk expressed that despite some negative sentiments, the overall economic activities remain encouraging, especially in tourism. “What we’re seeing from our clients is improved activity levels and positive feedback, making it challenging to justify a downward revision of our forecast. In fact, revising the numbers upward appears much more feasible,” he added.
In July, Westpac maintained its conservative 2.5 percent projection, lower than the Reserve Bank of Fiji’s official estimate of 2.8 percent, while ANZ forecasted a growth rate of 3.4 percent for the year. However, the introduction of Fiji Airways’ new route to Dallas is being considered a new catalyst for economic growth in the region.
Smirk remarked, “This new route is a significant driver of growth that’s prompting us to reconsider our projections. The extent of this impact will depend on our ability to quickly increase capacity to accommodate a growing number of visitors.”
He concluded by highlighting that capacity constraints may limit growth, but the size of the American market presents a substantial opportunity for Fiji’s tourism sector.