The Reserve Bank of Fiji has reported that July saw a record 98,332 visitors arriving in Fiji, marking the highest number ever recorded for that month. This brings the total number of visitors for the year to 545,487, representing a 6.7 percent increase compared to the same period in 2023.
Consumption remains buoyant due to robust tourism activity, rising income levels, and increased inward remittances. Additionally, recent indicators suggest a gradual improvement in investment activities.
Financial conditions are favorable for growth, highlighted by a substantial banking system liquidity of $2.2 billion as of August 28 and historically low lending rates. Commercial bank lending has increased, resulting in an 11.6 percent expansion in private sector credit in July.
Headline inflation reached its second peak of 2024 in July at 6.8 percent, primarily driven by rises in food and non-alcoholic beverages, alcoholic beverages, tobacco and narcotics, transportation, as well as housing and utilities. However, as the impact of the 2023 VAT rate hike diminishes, inflation is expected to ease to approximately 4.0 to 5.0 percent by the end of the year. As of August 29, foreign reserves stood at around $3.7 billion, enough to cover six months’ worth of imports, with expectations that they will remain sufficient in the medium term.
The Reserve Bank of Fiji will continue to assess incoming data and adjust its monetary policy as necessary. Furthermore, the Bank’s Board decided to maintain the Overnight Policy Rate at 0.25 percent during its August meeting. Domestic economic activity is showing positive momentum, particularly with visitor arrivals exceeding expectations and recent advancements in sectoral production.