The Reserve Bank of Fiji reported that July saw a record 98,332 visitors to the country, marking the highest number ever for that month and bringing the total for the year to 545,487 visitors—up 6.7 percent compared to the same period in 2023.
Overall consumption remains strong, bolstered by robust tourism, increased income levels, and remittances from abroad. Additionally, recent indicators suggest a slow but steady increase in investment activity.
Financial conditions are favorable for growth, supported by a substantial liquidity in the banking system amounting to $2.2 billion as of August 28, and lending rates that are near historical lows. Commercial bank lending is on the rise, contributing to an 11.6 percent increase in private sector credit in July.
However, annual headline inflation reached its second peak of 2024 in July at 6.8 percent, primarily driven by rising costs in food and non-alcoholic beverages, alcoholic beverages, tobacco and narcotics, transport, and housing and utilities. As the impact of the 2023 VAT rate increase diminishes, inflation is projected to decline to about 4.0 to 5.0 percent by the end of the year. As of August 29, foreign reserves were approximately $3.7 billion, adequate to cover six months’ worth of imports, and are expected to remain sufficient in the medium term.
The Reserve Bank of Fiji will continue to assess new information and adjust monetary policy as necessary. The Board decided to maintain the Overnight Policy Rate at 0.25 percent during its meeting in August. Signs of growing momentum in domestic economic activity are evident, particularly with visitor numbers exceeding expectations and recent improvements observed in sector production.