Another financial institution is optimistic about Fiji’s economic growth prospects, offering a favorable short- to medium-term outlook for a nation that previously faced less encouraging predictions.
Westpac, which had previously lowered its growth forecast for Fiji to 2.5 percent for 2024 due to factors like high inflation, population decline from emigration, a sluggish primary sector, decreasing construction activity, and regulatory challenges, is expected to revise its position in an upcoming quarterly report. The bank’s director and senior economist, Justin Smirk, noted that recent developments indicate “stronger than expected sentiments and growth in tourism.”
“The tourism figures have exceeded our expectations, leading to further growth in that sector,” Mr. Smirk stated during a media conference.
He continued, “The reason we are considering a revision of our forecasts is that, despite some negative sentiments, the overall outlook and growth in tourism have been more robust than anticipated. We’ve noticed improved activity among our clients and received better feedback on the economic climate. The risks in my forecast lean towards positive adjustments. While our views may differ from ANZ, which we respect as healthy competition, it is easier to justify an upward revision of our numbers.”
In July, Westpac had maintained its conservative growth projection of 2.5 percent, lower than the Reserve Bank of Fiji’s official estimate of 2.8 percent, while ANZ had projected a growth rate of 3.4 percent for the year.
This optimistic outlook comes after Fiji Airways announced a new route to Dallas, which is seen as a potential catalyst for economic development in Fiji.
“This development is prompting us to rethink our forecasts, and it’s certainly a positive development,” Mr. Smirk said.
He added that the impact of this new route would depend on Fiji’s capacity to handle the increased demand.
“To be frank, capacity will be the limiting factor. The American market offers considerable potential, but the growth will depend on our ability to meet that demand. Nevertheless, it’s a significant opportunity.”