The Reserve Bank of Fiji reported that July saw a record 98,332 visitors to Fiji, marking the highest number for any month and bringing the total for the year to 545,487 visitors, which is 6.7 percent higher than the same period in 2023.
Consumption remains strong, driven by robust tourism, increased income levels, and remittances. Additionally, the latest indicators point to a gradual increase in investment activity.
Financial conditions are favorable for growth, supported by high banking system liquidity of $2.2 billion as of August 28, and lending rates at near historical lows. Commercial bank lending is on the rise, with private sector credit expanding by 11.6 percent in July.
Annual headline inflation reached its second peak of 2024 in July at 6.8 percent, primarily influenced by costs related to food, non-alcoholic beverages, alcoholic beverages, tobacco, transport, and housing. As the effects of the 2023 VAT rate increase begin to dissipate, inflation is projected to ease to about 4.0 percent to 5.0 percent by the end of the year. Foreign reserves are estimated at around $3.7 billion as of August 29, sufficient to cover six months’ worth of imports, and are expected to remain adequate in the medium term.
The Reserve Bank of Fiji will continue to assess incoming data and adjust its monetary policy as necessary. The RBF Board decided to maintain the Overnight Policy Rate at 0.25 percent during its August meeting. Domestic economic activity is showing signs of growth, with visitor arrivals exceeding expectations and improvements noted in various sectors.