Westpac has revised its projection for the Fijian economy, now expecting growth of 3.0 percent in 2024, compared to a previous estimate of 2.5 percent. This adjustment is based on stronger-than-anticipated key economic indicators.
In a quarterly economic update released today, Westpac noted that although rising prices and slow growth in partner countries pose challenges, Fiji’s economy is supported by a vibrant tourism sector, increased industrial activity, and a recovery in consumer spending, despite ongoing labor issues.
The report highlighted that the tourism industry continues to perform well, with visitor numbers increasing by 6.9 percent in the first three quarters of 2024. Westpac projects that total visitor arrivals for the year will reach approximately 990,000, close to the one million mark.
A new non-stop flight service between Fiji and Dallas, set to launch in December, is expected to create significant opportunities for the tourism sector, potentially bringing an additional 1,000 passengers each week. Fiji Airways is reportedly exploring new routes to capitalize on this growth.
However, consumers have faced challenges due to rising costs, with the annual average inflation rate reaching 5.3 percent in August, primarily driven by increases in food and non-alcoholic beverage prices. Westpac anticipates that as inflation pressures ease in advanced economies, domestic inflation will also decline, although prices are expected to remain high by historical standards.
Furthermore, the Fijian government recorded a lower net deficit of 3.4 percent for FY2023-24, which was attributed to careful spending. As of July 2024, the debt-to-GDP ratio stood at 78.3 percent. Westpac noted that the government succeeded in revenue collection, nearing its original target, while maintaining control over expenditures.
The fiscal stimulus outlined in the last budget aims to promote consumption growth, while encouraging the private sector to invest and contribute to economic expansion.