The Reserve Bank of Fiji has reported that July saw a record 98,332 visitors to Fiji, the highest number for that month, bringing the total for the year to 545,487 visitors—an increase of 6.7 percent compared to the same period in 2023.
Consumption remains strong, bolstered by robust tourism, higher income levels, and remittances. Additionally, recent indicators suggest a gradual increase in investment activity.
Current financial conditions are favorable for growth, with the banking system’s liquidity at $2.2 billion as of August 28 and lending rates near historic lows. Commercial bank lending has also been on the rise, contributing to an 11.6 percent expansion in private sector credit in July.
Inflation hit its second peak of 2024 in July at 6.8 percent, driven primarily by increases in food and non-alcoholic beverages, alcoholic beverages, tobacco and narcotics, transport costs, and housing utilities. However, as the effects of the 2023 VAT rate increase begin to lessen, inflation is forecast to moderate to between 4.0 percent and 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 of imports and 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 needed. Moreover, the Bank’s Board decided to keep the Overnight Policy Rate steady at 0.25 percent during its August meeting. Domestic economic activity is gaining momentum, particularly with visitor arrivals exceeding projections and recent improvements in various production sectors.