Another banking institution expresses optimism regarding Fiji’s economic growth prospects, providing a favorable near- and medium-term outlook for the nation, which has seen less promising forecasts in the past.
Westpac, which recently lowered its growth prediction for Fiji to 2.5 percent for 2024 due to factors such as high inflation, a declining population coupled with significant emigration, underperforming primary sectors, reduced construction activity, and regulatory challenges, is expected to revise its stance in its upcoming quarterly report. This change is influenced by what the bank’s director and senior economist, Justin Smirk, described as “stronger than expected sentiments and growth in tourism.”
During a media conference held yesterday, Mr. Smirk commented, “The tourism numbers are a lot stronger than we expected, indicating further growth in this sector.” He outlined the pressures guiding the potential adjustment of their forecasts, noting, “Despite some negative sentiments, the overall growth in tourism has exceeded expectations. We’re receiving better feedback from our clients, and everything points toward an upward revision.”
In July, Westpac had maintained its conservative estimate of 2.5 percent, which is lower than the Reserve Bank of Fiji’s official forecast of 2.8 percent, while ANZ had projected a growth rate of 3.4 percent for the year. This came before Fiji Airways announced its new route to Dallas, which analysts believe could serve as a fresh catalyst for economic growth.
Mr. Smirk acknowledged the significance of this development, stating, “It’s a growth driver that’s making us rethink our forecast. So yes, it’s a big positive.” He added that the extent of this opportunity will depend on the ability to enhance capacity to accommodate the expected influx of travelers, highlighting, “The constraint will be capacity. The size of the American market is beyond any considerations you currently have, so it’s up to you how much you grow, but yes, it’s a good opportunity.”