Westpac has revised its growth projection for the Fijian economy to 3.0 percent for 2024, an increase from the previous estimate of 2.5 percent. This revision is attributed to stronger-than-expected indicators.
In its latest quarterly economic update, Westpac noted that despite facing challenges such as rising prices and slow growth in key partner countries, Fiji’s economy has remained resilient, buoyed by a thriving tourism sector, heightened industrial activity, and a resurgence in consumer spending, even amid labor market difficulties.
Westpac indicated that this positive performance puts the economy on track to align with its historical growth trends in the medium term.
The report highlighted that the tourism sector is experiencing healthy growth, with visitor arrivals increasing by 6.9 percent in the first three quarters of 2024. The projection for the year suggests total visitor arrivals will reach approximately 990,000, approaching the one-million mark.
The anticipated launch of a non-stop flight between Fiji and Dallas in December is expected to open new opportunities for the tourism sector, potentially adding around 1,000 passengers weekly. Additionally, Fiji Airways is exploring new routes to further capitalize on growth opportunities.
Westpac acknowledged that consumers have faced significant challenges due to soaring prices, with the twelve-month average inflation rate reaching 5.3 percent as of August, primarily driven by increases in food and non-alcoholic beverage prices. However, as worldwide inflation rates among advanced economies decline, domestic inflation is expected to follow suit, although prices will remain high compared to historical levels.
Furthermore, the report noted that the Fijian government recorded a lower net deficit of 3.4 percent for the fiscal year 2023-24, attributed to prudent spending measures. As of July 2024, the nation’s debt-to-GDP ratio stood at 78.3 percent. The government excelled in revenue collection last fiscal year, nearly hitting its target, while also achieving savings through careful expenditure management.
The fiscal measures announced in the last budget aim to stimulate consumption growth, with a focus on encouraging private sector investment to drive economic growth.