The Reserve Bank of Fiji reported that in July, the country welcomed 98,332 visitors, marking a record high for that month and bringing the total number of visitors for the year to 545,487, a 6.7 percent increase compared to the same period in 2023.
Overall demand in the economy remains strong, driven by robust tourism, rising income levels, and increased remittances. Recent indicators also suggest a gradual rise in investment activity.
Financial conditions are favorable for economic growth, bolstered by a high banking system liquidity of $2.2 billion as of August 28, along with historically low lending rates. Lending from commercial banks has sped up, leading to an 11.6 percent increase in private sector credit in July.
Annual headline inflation peaked at 6.8 percent in July 2024, primarily due to rising prices in food and non-alcoholic beverages, alcoholic beverages, tobacco and narcotics, transport, as well as housing and utilities. With the impact of the 2023 VAT rate increase beginning to diminish, inflation is anticipated to decrease to around 4.0 to 5.0 percent by the end of the year. Foreign reserves are estimated at approximately $3.7 billion as of August 29, which is sufficient to cover six months of retained imports of goods and services, and are expected to remain adequate in the medium term.
The Reserve Bank of Fiji will continue to assess incoming information and adjust monetary policy as necessary. Additionally, the Bank’s Board decided to maintain the Overnight Policy Rate at 0.25 percent during its August meeting. Domestic economic activity appears to be gaining momentum, especially with visitor arrivals exceeding expectations and noted improvements in sectoral production.