Deputy Prime Minister and Minister for Finance, Strategic Planning, National Development and Statistics, Professor Biman Prasad, presented the Reserve Bank of Fiji’s Annual Report for the period of August 2023 to July 2024 in Parliament this week. This report offers a comprehensive overview of the Reserve Bank’s audited accounts and operations for the financial year that concluded on July 31, 2024.
In his remarks, Governor Ariff Ali emphasized that the report underlines the Bank’s commitment to fulfilling its objectives and its ongoing support for the Fijian economy in the face of unforeseen economic challenges. He noted a significant rise in inflation during the financial year, with an average inflation rate of 4.8%, up from 2.7% the previous year. Nevertheless, he reassured that foreign reserves remained robust at approximately $3.6 billion, sufficient to cover 5.8 months’ worth of imports.
Looking ahead, the economy is expected to grow by 3.8% in 2024, following an impressive growth rate of 7.5% in 2023, largely driven by a strong performance in the services sector, particularly due to higher-than-anticipated visitor arrivals.
Professor Prasad echoed these sentiments in Parliament, stating that despite global uncertainties—marked by slowing economic growth, inflationary pressures, supply chain disruptions, and geopolitical tensions—the Fijian economy has shown remarkable resilience. The tourism sector, a crucial pillar of Fiji’s recovery post-pandemic, reported a 6.5% increase in visitor arrivals in the first ten months of 2024 compared to the previous year.
The banking sector also remains stable and competitive, supported by strong capital positions, diminished non-performing loans, and increased private sector lending. Furthermore, the Reserve Bank did not extend additional loans through its disaster relief and export finance programs due to the prevailing supportive economic environment.
Ali shared that capital controls have been relaxed in response to favorable foreign reserve conditions, allowing for increased limits on capital transactions. The insurance sector has maintained a solvency surplus and has shown satisfactory earnings and liquidity levels.
The Fiji National Provident Fund met its required solvency standards, while capital markets have shown growth in both market value and funds under management by investment schemes. The report also highlights the Bank’s focus on innovation, particularly its progress in digitally transforming Fiji’s payment systems. Notably, phase two of the National Payment System’s automated clearinghouse was launched in November 2023, facilitating instant interbank transactions, with plans for further advancements underway.
In June 2024, the Reserve Bank launched the “Natadola Roadmap to Inclusive Green Finance,” collaborating with other Pacific Island central banks to promote green financial initiatives in vulnerable regions. Additionally, partnerships aimed at empowering women entrepreneurs have been strengthened through initiatives like the Women in Finance Code.
Throughout this fiscal year, the Reserve Bank celebrated its 50th anniversary, reflecting on its historical journey and accomplishments. The Bank has also completed a strategic plan for the next five years, acknowledging the essential contributions of its team and stakeholders.
This report signals a promising outlook for the Fijian economy, showcasing resilience and adaptability, particularly in the tourism sector, which is crucial for economic recovery. The ongoing modernization of Fiji’s financial systems and dedication to sustainable and inclusive finance initiatives reflect a commitment to fostering a brighter economic future for all Fijians.
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