The Fiji Bureau of Statistics has announced that the year-end inflation for 2025 was recorded at a notable 0.0 percent. This stable inflation rate is attributed largely to a decrease in fuel and gas prices, which counterbalanced the rise in prices for alcoholic beverages, tobacco, and narcotics. Additionally, prices for food and non-alcoholic beverages remained unchanged throughout the year.
Looking ahead, the Reserve Bank of Fiji (RBF) projects an inflation rate of approximately 2.5 percent for 2026, contingent on the absence of external economic shocks or substantial tariff increases, such as the proposed rise in electricity costs. Such increases could put upward pressure on prices due to both direct effects and broader cost implications.
The RBF also forecasts continued economic growth for Fiji, marking the fifth consecutive year of expansion in 2026, with an expected growth rate of around three percent. This growth is anticipated to be bolstered by a two percent increase in visitor arrivals.
However, the Governor of the RBF has warned of potential challenges that could impact this outlook. Rising geopolitical and trade tensions, national elections in Fiji and among key trading partners, subdued demand from crucial tourism markets, and the potential for increased domestic electricity tariffs are noted as risks.
Tourism activity in Fiji performed better than anticipated in 2025, with a marginal increase of 0.3 percent in visitor arrivals, totaling 986,367, although this fell short of the previous year’s substantial 5.7 percent growth. The increase was primarily supported by heightened arrivals from the United States, Continental Europe, Pacific Island Countries, and the United Kingdom, while numbers from traditional markets such as New Zealand and Australia were lackluster.
Sector performance exhibited mixed results, with the mahogany and electricity sectors experiencing increased output. In contrast, production in pinewood commodities, mineral water, gold ore, and sugar saw declines.
Consumption indicators reflected robust activity throughout 2025, fueled by rising incomes, remittance inflows, and increased commercial bank lending for consumption, particularly as a result of a lower VAT rate. The RBF expects this positive momentum to persist, aided by ongoing lending increases and higher government spending, which includes new back-to-school assistance programs.
Investment activity is gradually on the rise, evidenced by a resurgence in both private and public construction projects, alongside a decline in previously high building material prices. Future indicators, such as an increase in building permits and new investment lending, suggest a more promising outlook for investment, though the impending national elections may introduce a period of caution among investors.
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