Fiji’s economic outlook is positive, according to Dr. Kishti Sen, ANZ’s Pacific economist. He noted that the domestic economy is performing “quite well,” with a projected GDP growth of 3.4 percent for this year. Dr. Sen, based in Australia, highlighted private investment as the main driver for the economy in the second half of this year and into 2025 and 2026.
He praised the impressive recovery in international visitor arrivals since the pandemic, which quickly restored Fiji’s tourism levels to those of 2019. However, he indicated that the significant contribution of tourism to GDP growth is expected to slow down moving forward. “The economy is not going to fall off a cliff, but tourism’s contribution to GDP growth will taper off,” Dr. Sen stated during a media roundtable discussion at ANZ’s Suva headquarters.
Dr. Sen explained that Fiji’s accommodation capacity is already maxed out, and while tourism will continue to be a factor, he is particularly enthusiastic about the prospects for the domestic economy and its demand. He acknowledged that there has been a decline in consumer demand as many Fijians have moved abroad for at least a year, impacting retail sales. Nevertheless, he is optimistic that retail turnover will improve in the latter half of the year.
The economist attributed this to expected wage inflation that should boost consumer demand and, in turn, household spending. He believes that as private investment increases next year, investors are likely to proceed with investments, supported by the government’s stable legislative and policy environment. This increase in private investment could lead to job creation and enhanced spending power for households.
Dr. Sen concluded that with consumer demand remaining stable, a pick-up in private investment, and increased government spending, the domestic economy is positioned favorably.