Westpac has announced that the Fijian economy is expected to grow by 3.0 percent in 2024, an increase from the prior estimate of 2.5 percent, largely due to unexpectedly strong key indicators.
In its latest quarterly economic update, Westpac noted that despite challenges posed by rising prices and sluggish growth in partner countries, Fiji’s economy is thriving, supported by a robust tourism sector, increased industrial activity, and a rebound in consumption, even in the face of labor challenges.
The report indicates that this strong performance is paving the way for the economy to return to its historical growth trend in the medium term.
The tourism industry is seeing healthy growth even with subdued performance in traditional source markets, with visitor numbers up by 6.9 percent during the first three quarters of 2024. Westpac projects that the year will end with total visitor arrivals reaching approximately 990,000, just short of the million mark.
Additionally, a new 13-hour non-stop flight between Fiji and Dallas, set to commence in December, is expected to bring around 1,000 additional passengers per week to the island, creating new opportunities for the tourism sector. Fiji Airways is also exploring new routes to tap into further growth opportunities.
Although soaring prices have posed challenges for consumers, with annual average inflation hitting 5.3 percent in August—primarily from food and non-alcoholic drink categories—Westpac anticipates that as inflation in advanced economies declines, domestic inflation in Fiji will also ease, although prices will remain high compared to historical standards.
Furthermore, the Fijian government reported a much lower net deficit of 3.4 percent for the fiscal year 2023-24, attributed to underspending, while the debt-to-GDP ratio stood at 78.3 percent in July 2024.
Last fiscal year, the government excelled in revenue collection, nearly meeting its original target, while managing savings on expenditures through careful oversight. The fiscal stimulus introduced in the latest budget aims to encourage consumption growth, while the private sector is being prompted to boost investment growth.