The Reserve Bank of Fiji has reported that in July, the country welcomed 98,332 visitors, marking the highest number for any month and bringing the total for the year to 545,487 visitors—this is a 6.7 percent increase compared to the same period in 2023.
Consumption continues to show positive growth, bolstered by robust tourism, increasing income levels, and remittances. Additionally, recent indicators suggest that investment activity is gradually picking up.
Financial conditions remain favorable for growth, evidenced by high banking system liquidity of $2.2 billion as of August 28 and lending rates that are near historic lows. Commercial bank lending has been on the rise, with private sector credit increasing by 11.6 percent in July.
The annual headline inflation reached its second peak of 2024 at 6.8 percent in July, primarily driven by the costs of food and non-alcoholic beverages, alcoholic beverages, tobacco, transport, and housing utilities. As the impact of the VAT rate increase from 2023 diminishes, inflation is projected to ease to approximately 4.0 to 5.0 percent by year-end. Foreign reserves are currently around $3.7 billion as of August 29, enough to cover six months of retained imports, and are expected to remain adequate in the medium term.
The Reserve Bank of Fiji will continue to assess incoming data and its effects on the current economic outlook, adjusting its monetary policy as necessary. In its August meeting, the RBF Board decided to maintain the Overnight Policy Rate at 0.25 percent. Signs of momentum in domestic economic activity are emerging, particularly with visitor arrivals exceeding projections and recent improvements in sectorial production.