Another financial institution is optimistic about the growth potential of Fiji, presenting a favorable outlook for the country’s economy in the near to medium term, which had recently faced unfavorable forecasts.
Westpac, which had previously reduced its growth forecast for Fiji to 2.5 percent for 2024 due to concerns about high inflation, population decline, lackluster primary sector performance, decreasing construction activity, and regulatory challenges, is expected to revise its position in its upcoming quarterly report. According to Justin Smirk, director and senior economist at Westpac, the “stronger than expected sentiments and growth in tourism” are likely to influence this change.
“The tourism figures are much stronger than anticipated, leading us to expect further growth in this sector,” Mr. Smirk stated during a media conference.
He explained the reasons for potentially revising growth predictions, noting that despite some negative perceptions, overall economic activity and growth in tourism have surpassed expectations. “We’ve seen improved physical activity from our clients and are receiving better feedback from the market… So, where are the risks in my forecast? Everything I mention points upward. While we don’t always align with ANZ, it’s challenging to argue for a downward revision. It makes more sense to consider an upward adjustment.”
In July, Westpac maintained its conservative growth projection of 2.5 percent, which is lower than the Reserve Bank of Fiji’s official estimate of 2.8 percent. In contrast, ANZ had forecasted a growth rate of 3.4 percent for this year.
The recent announcement by Fiji Airways of a new route to Dallas is seen as a potential catalyst for economic growth in Fiji. Mr. Smirk remarked, “This is a growth driver prompting us to reassess our forecasts. Yes, it’s a significant positive.”
He noted that the extent of this impact will depend on how swiftly the necessary capacities can be developed to accommodate increased tourism. “Honestly, the limiting factor will be capacity. The size of the American market presents opportunities that far exceed current servicing capabilities. It’s up to us to decide how much we want to grow, but it’s undeniably a good opportunity.”