Fiji’s remittances are anticipated to reach approximately $1.34 billion by the end of this year, provided the current growth pattern persists. This influx of remittances has established itself as the country’s second-largest source of foreign exchange, following tourism, and has seen significant expansion during and following the COVID-19 pandemic, with 2023 figures hitting $1.25 billion.
Shamal Chand, a senior economist at Westpac Fiji, reported that personal remittances rose by 5.0 percent to $622.2 million in the first half of this year. He noted that a substantial portion of these transfers was facilitated through mobile network operators (45 percent), money transfer operators (36.7 percent), and commercial banks (17.8 percent).
Chand projected that if current trends persist, remittances could reach around $1.34 billion by the end of 2024. This would indicate a more moderate growth rate of 6.9 percent, a sharp decline from the average 20 percent growth recorded between 2020 and 2023, as trends in migration are expected to decelerate.
Referencing the latest 2019-20 Household Income and Expenditure Survey (HIES), he noted that the average household received $1,651.29 in remittances and gifts, with urban households averaging $1,866.10 and rural households at $1,372.80 each year.
Chand highlighted that one-fifth of remittances benefited households in the top 10 percent income bracket, while only 4.3 percent reached the lowest 10 percent income group, indicating that wealthier families are more likely to have relatives abroad who can send money home.
Conversely, he mentioned that the distribution of pensions and social benefits is generally more evenly shared across all income groups.
Chand pointed out that the effect of remittances on household income and spending behaviors has not been extensively studied. However, the recent HIES report indicated that overall consumption patterns are inclined more towards non-food items rather than food. He concluded that as household welfare improves, the proportion of spending on food typically decreases, reinforcing the notion that higher-income households receive more remittances and allocate a greater share of their spending to non-food items.