The Reserve Bank of Fiji (RBF) reported that annual headline inflation in Fiji reached just 1.3 percent in December 2024, marking the lowest year-end inflation rate recorded since 2021. This dramatic decrease in inflation is primarily attributed to the waning impacts of a Value Added Tax (VAT) increase implemented in 2023. This represents a significant decline from the 5.1 percent inflation noted in December 2023 and a peak of 7.1 percent in April 2024.

According to the RBF, the easing inflation rates are particularly encouraging as they reflect a slow rise in food prices, which have not seen such a minimal increase in nearly four years. The report also highlighted that the reduction can be linked to the removal of a 3.0 percent fiscal duty on raw materials, effective from the current fiscal year.

In related economic developments, the tourism sector continues to thrive, with a total of 899,098 visitor arrivals recorded by November 2024, representing a 6.2 percent increase compared to the same period in the previous year. Major contributions to this increase came from tourists from markets such as Australia, New Zealand, and the United States.

Sectoral performance also showed a positive trajectory, with electricity generation up by 11.1 percent and gold production rising by an impressive 38 percent, attributed largely to increased output from the Tuvatu Gold mine. Meanwhile, the timber industry saw mixed results, with mahogany production declining by 13 percent, and mineral water production continuing to struggle with a 13 percent decrease.

This economic landscape is promising, providing a positive outlook for further recovery and growth in Fiji’s economy. As inflation subsides and tourism activity remains robust, the nation appears to be on a path toward sustained economic stability. As the impacts of previous tax hikes diminish, and with the continued positive indicators from various sectors, there is a hopeful tone for the future of Fiji’s fiscal health.