Fiji’s remittances are expected to reach approximately $1.34 billion by the end of this year if the current growth trends persist. This financial influx, which ranks as the country’s second-largest source of foreign currency after tourism, has experienced significant growth during and after the COVID-19 pandemic, amounting to $1.25 billion in 2023.
According to Shamal Chand, a senior economist at Westpac Fiji, personal remittances saw a 5.0 percent increase, reaching $622.2 million in the first half of this year. He noted that the majority of these funds were sent via mobile network operators (45 percent), money transfer services (36.7 percent), and commercial banks (17.8 percent).
Chand stated that if the current trends hold, remittances are forecasted to reach around $1.34 billion by the end of 2024, suggesting a more moderate growth rate of 6.9 percent compared to the average growth rate of 20 percent recorded between 2020 and 2023, as trends in migration are expected to decelerate.
He referenced the latest Household Income and Expenditure Survey (HIES) from 2019-2020, which indicated that the average household received $1,651.29 in remittances and gifts annually, with urban households averaging $1,866.10 and rural households receiving about $1,372.80.
Chand highlighted that one-fifth of the remittances are directed to households in the top 10 percent income bracket, while only 4.3 percent reach the lowest 10 percent income group, underscoring that wealthier families are more likely to have relatives abroad who can send money back home.
In contrast, he noted that pensions and social benefits tend to be distributed more evenly among all income brackets. Chand emphasized that while the impact of remittances on household income and spending habits has not been thoroughly researched, the recent HIES report reveals that overall consumption is skewed towards non-food items rather than food.
He added that as household welfare improves, the proportion of spending on food typically declines, further supporting the notion that higher-income groups receive more remittances and allocate a larger share of their spending to non-food categories.