ANZ Bank’s international economists, Tom Kenny and Kishti Sen, are forecasting a slowdown in Fiji’s economic growth in 2024 due to the cooling of the post-COVID tourism boom. In their latest Pacific Economic Outlook, they attribute this anticipated deceleration to capacity constraints and uncertainties in key home markets. However, they assured that there is no cause for alarm, stating, “The short answer is: don’t worry.”
The economists indicated that while consumer demand— a significant contributor to Fiji’s GDP— is expected to slow, signs of renewed private sector investment are emerging. They project a GDP growth of 2.8% in 2024, followed by 2.6% in 2025. They are optimistic that from 2027 onwards, economic growth will strengthen as international tourism continues to recover, driven by the addition of new tourism capacity.
This outlook is notably more conservative compared to the Reserve Bank of Fiji (RBF), which predicts a GDP growth of 3.8% in 2024 and 3.4% in 2025. The RBF cites the services sector and growth in trading partner economies as key factors propelling this optimistic forecast.
Supporting this financial projection is a notable resurgence in international visitor arrivals, which have returned to pre-pandemic levels, alongside the significant role of remittances in sustaining consumer demand. This influx of funds from overseas has been dubbed the “family bank,” greatly benefiting Fiji’s economy. Additionally, the construction sector is anticipated to rebound due to large projects slated for the latter half of the year, providing further optimism for economic growth.
While the overall economic landscape may experience challenges, the ongoing recovery of various sectors including tourism, agriculture, and construction hints at a positive trajectory. As the domestic economy continues to stabilize, there is hope for enhanced job creation and consumer spending power, bolstered by expected increases in private investment.
In conclusion, although growth projections may be tempered in the short term, a combination of steady private investment, ongoing recovery in tourism, and increased government spending indicates that Fiji’s economy is poised for a favorable outlook in the coming years.
Leave a comment