Westpac Fiji has increased its growth forecast for Fiji from 2.5 percent to 3.0 percent for this financial year. This information was shared by Westpac’s senior economist, Shamal Chand, in their quarterly economic update released yesterday, highlighting that Fiji is set for another year of substantial growth.
Chand noted that early indicators suggest strong activity in the tourism sector, alongside robust performances in construction, investment, and private sector credit growth. The revision in outlook is primarily attributed to a boost in tourism, favorable investment and construction opportunities, a rebound in manufacturing, positive wholesale and retail sales trends, and the fiscal stimulus included in the 2024-2025 National Budget.
“Given that the provisional growth numbers for 2023 fell short of earlier expectations, this prompted an upward adjustment to this year’s growth rate,” Chand explained. He also indicated that looking forward to the medium term, starting from 2025, economic growth is expected to stabilize at around 3.4 percent, which corresponds to the historical average.
Chand referenced significant growth indicators provided by the Reserve Bank of Fiji (RBF) up to August this year, including:
– Electricity production and consumption, which increased by 11.0 percent and 10.1 percent, respectively.
– Gold production saw a remarkable rise of 30.3 percent.
– Cane production grew by 18.3 percent as the harvesting season began.
– Cement production and sales experienced increases of 6.6 percent and 7.6 percent, respectively.
– Domestic credit expanded by 6.8 percent.
– Private sector credit surged by 11.6 percent, indicating strong borrowing and investment interest in the market.
“This gives us further confidence to enhance our economic outlook for this year. With one quarter left in this year, we are entering 2025 on a positive note, and the current momentum is expected to continue into the new year,” Chand stated. He added that with several major investment projects underway and ongoing expansions in the tourism sector, supported by a decrease in resident departure numbers, this will be essential for Fiji to achieve growth rates above 3 percent in the medium term.