Fiji has experienced a significant boost in outward remittances, with January 2024 showing an impressive 84.8 percent increase compared to the same month in the previous year. This growth is primarily driven by a rise in the number of foreign workers, leading to a notable increase in financial transfers to families in Fiji. ANZ Bank’s senior economists, Dr. Kishti Sen and Tom Kenny, forecast that total remittance outflows will escalate from approximately $267 million in 2021 to around $510 million by 2024, propelled by higher migrant remittances.
The economists reported that personal remittances surged from $69 million in 2021 to $192 million, averaging an annual growth rate of 41 percent. Transfers from foreign employees are also on the rise, forecasted to increase from $130 million in 2021 to $223 million by 2024. Before the pandemic, these yearly transfers averaged about $135 million, but the trend has shifted to an average of $204 million annually since 2022.
Despite the upswing in remittances, Dr. Sen and Mr. Kenny reassured that these outflows do not pose a risk to Fiji’s foreign reserves, projected to remain robust at nearly $820 million in 2024. Factors contributing to this economic stability include the essential needs of foreign workers for housing, transportation, and food, which in turn stimulate broader economic activity.
These remittance trends follow earlier forecasts suggesting that personal remittances could reach around $1.34 billion by the end of 2024. This figure would signify moderate growth compared to the peak levels reached during the pandemic. The data further reveals that the majority of these funds are transferred via mobile networks and money transfer operators, signaling a shift in how remittances are handled. Urban households tend to receive a higher average of remittances than their rural counterparts.
The insights from economists highlight the complex economic landscape in Fiji, which reflects both the benefits and challenges associated with increased foreign worker migration. While the surge in remittances demonstrates enhanced economic activity, it also underscores a changing labor market where foreign workers are essential for filling gaps left by local labor.
As Fiji adapts to these economic changes, the ongoing rise in remittances is likely to enhance household welfare, enabling increased spending on non-food items and suggesting a burgeoning economy. This scenario paints a positive outlook for the future, showcasing the resilience and adaptability of Fijian households and the overall economy in response to global labor trends.
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