Fiji’s Household Spending Soars But Investment Faces Hurdles

The Reserve Bank of Fiji (RBF) has reported a significant increase in household consumption across the country, while business investment continues to lag. In its latest review for June 2025, the RBF highlighted that rising wages, increased credit availability, and robust remittance flows are fueling household spending. Notably, new consumption loans surged by 52.8% in the first five months of the year, reaching $995.1 million, primarily benefiting the wholesale, retail, hotel, and restaurant sectors.

Inward remittances showed a growth of 14.4%, totaling $580.3 million, with most funds being transferred through mobile money platforms. Additionally, there was a 24.1% rise in vehicle registrations driven by heightened interest in both new and used cars. The bank reported that net VAT collections also increased by 8.1%, a reflection of stronger spending and enhanced compliance.

However, despite these positive consumption trends, investment loans saw a decline of 3.7%, with lending to the real estate sector dropping by 14.5% and construction loans decreasing by 2.8%. Regulatory delays and escalating costs continue to dampen investor enthusiasm, even as demand for construction materials is on the rise and more building permits are being issued. The RBF cautioned that while there are signs of progress in building activity, overall investment growth remains uneven, which could hinder medium-term recovery.

This situation parallels earlier reports from the RBF, noting consistent challenges in the investment landscape while recognizing encouraging trends in private sector credit and overall economic sentiment. The RBF’s assessments suggest a cautiously optimistic view toward Fiji’s economic future. Addressing regulatory hurdles and the rising costs of construction materials may foster a more robust investment environment and contribute to continued growth.

As Fiji navigates these complexities, the hope remains that ongoing efforts to improve the investment climate could lead to a more harmonious balance between consumption and investment, paving the way for sustainable economic development.