Fiji’s economy is reportedly in a strong position, according to Dr. Kishti Sen, ANZ’s Pacific economist. He noted that the domestic economy is performing “quite well,” with a GDP growth forecast of 3.4 percent for this year.
Dr. Sen, based in Australia, indicated that private investment will be a key driver of economic growth as the country moves into the latter half of this year and into 2025 and 2026. While he acknowledged the impressive increase in international visitor numbers following the pandemic, which brought Fiji’s tourism figures back to 2019 levels, he cautioned that the significant contribution of tourism to GDP growth is expected to decline.
“The economy is not going to fall off a cliff, it’s just that tourism’s contribution to GDP growth is going to slow down,” Dr. Sen expressed during a media roundtable at ANZ’s headquarters in Suva. He pointed out that Fiji’s accommodation capacity is already at its limit.
Despite some softness in consumer demand caused by a substantial number of Fijians relocating abroad for at least a year, Dr. Sen remains optimistic that retail sales will rebound in the latter half of the year. He suggested that wage inflation expected to arise during this period could enhance consumer demand and bolster household spending.
Dr. Sen anticipates that private investment will increase next year, driven by the government’s provision of legislative and policy certainty. This investment is projected to create jobs and enhance the spending power of households.
In summary, Dr. Sen believes that a combination of steady consumer demand, rising private investment, and increased government spending indicates that the domestic economy is positioned well for future growth.