The Reserve Bank of Fiji reported that in July, a record 98,332 visitors arrived in Fiji, marking the highest number recorded for any month and bringing the total for the year to 545,487 visitors, which is 6.7 percent higher compared to the same period in 2023.
Consumer demand remains robust, supported by thriving tourism, increased income levels, and remittances. Additionally, recent indicators suggest a gradual increase in investment activities.
Financial conditions are favorable for growth, with high liquidity in the banking system amounting to $2.2 billion as of August 28, and lending rates at near-historical lows. Commercial bank lending has accelerated, leading to an 11.6 percent expansion in private sector credit in July.
Headline inflation for July reached its second peak of 2024 at 6.8 percent, primarily driven by costs in food and non-alcoholic beverages, alcoholic beverages, tobacco and narcotics, transport, and housing utilities. As the impact of the 2023 VAT rate increase begins to diminish, inflation is anticipated to decrease to between 4.0 percent and 5.0 percent by the year’s end. Foreign reserves stood at approximately $3.7 billion as of August 29, providing coverage for six months of imported goods and services, and are expected to remain sufficient in the medium term.
The Reserve Bank of Fiji will continue to assess incoming data and its impact on the economic outlook, adjusting monetary policy as necessary. The Board decided to maintain the Overnight Policy Rate at 0.25 percent during its August meeting. Overall, domestic economic activity is gaining momentum, particularly with visitor arrivals exceeding expectations and recent improvements observed in various sectors.