The Reserve Bank of Fiji has reported that July saw a record-breaking 98,332 visitors to the country, marking the highest number of arrivals for any single month. This brings the total visitor count for the year to 545,487, which is 6.7 percent higher compared to the same period in 2023.
The bank indicated that consumption remains strong, bolstered by robust tourism activity, increased income levels, and remittances from abroad. There are also signs of a gradual increase in investment activity according to the latest indicators.
Financial conditions are favorable for growth, with the banking system holding a significant liquidity of $2.2 billion as of August 28 and lending rates at near historical lows. Commercial bank lending is on the rise, leading to an 11.6 percent expansion in private sector credit in July.
In terms of inflation, the annual headline rate reached 6.8 percent in July, largely driven by costs associated with food, non-alcoholic beverages, alcoholic beverages, tobacco, transport, and housing utilities. However, with the impact of the 2023 VAT rate increase diminishing, inflation is projected to decrease to between 4.0 and 5.0 percent by the end of the year.
As of August 29, foreign reserves stood at approximately $3.7 billion, adequate to cover 6.0 months of retained imports while expected to remain sufficient in the medium term. The Reserve Bank of Fiji will continue to examine incoming data and adjust monetary policy as necessary. Additionally, the bank’s Board decided to keep the Overnight Policy Rate steady at 0.25 percent during its August meeting. Domestic economic activity is showing signs of momentum, particularly with visitor arrivals exceeding expectations and recent improvements in various sectors.