Fiji has seen a remarkable increase in outward remittances, with January 2024 figures showing an 84.8 percent rise compared to the same month last year. This surge is largely attributed to an influx of foreign workers, which has resulted in a significant uptick in financial transfers to families back home. According to ANZ Bank’s senior economists, Dr. Kishti Sen and Tom Kenny, total outflows of remittances are projected to grow from around $267 million in 2021 to approximately $510 million by 2024, driven by increased migrant transfers.
The economists highlighted that personal remittances have surged from $69 million in 2021 to $192 million, reflecting an average annual growth rate of 41 percent. Notably, transfers from foreign workers have also increased, moving from $130 million in 2021 to $223 million by 2024. Prior to the pandemic, these transfers averaged about $135 million per year, but since 2022, the figure has jumped to $204 million annually.
Despite these increases, Dr. Sen and Mr. Kenny reassured that outward remittances are not a threat to Fiji’s foreign reserves, which are projected to hold a surplus close to $820 million in 2024. They indicated that factors contributing to this stability include the need for housing, transportation, and food for foreign workers, which help stimulate the broader economy.
Fiji’s rising remittance trends align with previous forecasts that suggested personal remittances could reach approximately $1.34 billion by the end of 2024. This would mark a moderate growth rate compared to the heights reached during the pandemic. The vast majority of these funds are sent through mobile networks and money transfer operators, indicating a shift in how remittances are processed, further illustrated by the data showing that urban households receive a higher average of remittances compared to rural ones.
The insights provided by economists underline the dual nature of the economic landscape in Fiji, showcasing both the benefits and the potential concerns brought about by increased foreign worker migration. While the recent growth in remittances indicates a strengthened economic activity, it also reflects a changing labor market where foreign workers fill crucial gaps that local labor may not provide.
As Fiji navigates these economic shifts, the continued increase in remittances may ultimately contribute to household welfare improvements, leading to enhanced spending on non-food items, indicative of a growing economy. It paints a hopeful picture for the future, emphasizing the resilience and adaptation of Fijian households and the overall economy in response to global labor patterns.
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