Another financial institution has expressed optimism about Fiji’s economic growth potential, providing an encouraging near- and medium-term outlook, despite previously downgrading its forecast.
Westpac, which had reduced its growth projection for Fiji to 2.5 percent for 2024 due to factors like high inflation, a declining population amid high emigration, sluggish primary sectors, reduced construction activity, and regulatory obstacles, appears poised to revise its forecast in light of recent trends. According to Justin Smirk, Westpac’s director and senior economist, stronger-than-anticipated growth in tourism has prompted this reassessment.
“The tourism numbers have exceeded our expectations, indicating significant growth in that sector,” Mr. Smirk stated at a media conference.
He further elaborated on the reasons for a potential revision in their economic outlook: “Despite some negative sentiments, overall economic activity has surpassed expectations, particularly regarding tourism. We’ve noted improved physical activity among our clients, leading to better feedback. The risks in my forecast are skewed upwards. Although we may not always align with ANZ’s views, it’s challenging to justify a downward revision; an upward revision seems far more plausible.”
In July, Westpac maintained a conservative 2.5 percent growth estimate, lower than the Reserve Bank of Fiji’s official estimate of 2.8 percent, while ANZ anticipated a 3.4 percent growth rate for the year. This was before the announcement by Fiji Airways regarding a new route to Dallas, which is seen as a significant catalyst for economic growth in Fiji.
“It’s a growth driver that leads us to reconsider our forecast. Indeed, it’s a substantial positive,” Mr. Smirk added.
However, he noted that the extent of this opportunity would depend on the ability to accommodate increasing passenger volume.
“To be candid, capacity constraints may pose a challenge. The size of the American market presents tremendous potential, and it’s up to us to determine our growth trajectory, but this is certainly a favorable opportunity.”