Fiji’s remittances are expected to reach approximately $1.34 billion by the end of this year if the current growth trend continues. Remittances have become the nation’s second-largest source of foreign exchange following tourism, experiencing significant growth during and after the COVID-19 pandemic, with totals reaching $1.25 billion in 2023.
Shamal Chand, a senior economist at Westpac Fiji, reported that personal remittances rose by 5.0 percent, amounting to $622.2 million in the first half of this year. Most transfers were made through mobile network operators (45 percent), money transfer operators (36.7 percent), and commercial banks (17.8 percent).
Chand noted that if the current trends persist, remittances could reach around $1.34 billion by the end of 2024, representing a more modest growth rate of 6.9 percent compared to the average growth of 20 percent from 2020 to 2023, as migration trends are anticipated to slow.
He referred to data from the 2019-20 Household Income and Expenditure Survey, indicating the average household received $1,651.29 in remittances and gifts annually, with urban households averaging $1,866.10 and rural households $1,372.80. Notably, one-fifth of remittances are allocated to households within the top 10 percent income bracket, while only 4.3 percent benefit those in the lowest income group.
This disparity implies that wealthier families are more likely to have overseas relatives capable of sending money home. Conversely, pensions and social benefits were noted to be distributed more equitably across all income strata.
Chand also commented on the limited study of the impact of remittances on household income and consumer behavior, though the recent report highlighted an inclination towards non-food expenditures as household welfare improves. He explained that as financial conditions enhance, the proportion of spending on food generally decreases, supporting the notion that higher-income groups receive more remittances and allocate a greater share of their spending towards non-food items.