The Reserve Bank of Fiji reported that July saw a record 98,332 visitors arriving in the country, marking the highest monthly number of visitors ever recorded. This brings the total number of visitors for the year to 545,487, which is an increase of 6.7 percent compared to the same period in 2023.
The bank noted that overall consumption remains positive, bolstered by robust tourism activities, rising income levels, and remittances from abroad. Additionally, recent partial and leading investment indicators suggest a slow uptick in investment activity.
Financial conditions continue to be favorable for growth, with the banking system holding liquidity of $2.2 billion as of August 28, and lending rates at near-historic lows. Commercial bank lending is on the rise, contributing to an 11.6 percent increase in private sector credit in July.
Headline inflation reached its second peak of 2024 in July, recorded at 6.8 percent, primarily driven by increases in food prices, non-alcoholic and alcoholic beverages, transport, and housing costs. As the impact of the 2023 VAT rate hike diminishes, inflation is anticipated to decrease to around 4.0 to 5.0 percent by the end of the year. Foreign reserves are currently estimated at $3.7 billion, enough to cover six months of imports and expected to remain stable in the medium term.
The Reserve Bank of Fiji will continue to assess new information and its implications for the economic outlook to adjust monetary policy as necessary. In its August meeting, the bank’s Board decided to keep the Overnight Policy Rate steady at 0.25 percent. Signs of increased momentum in domestic economic activity are evident, particularly with visitor numbers exceeding expectations and improvements in various production sectors.