The Reserve Bank of Fiji has reported that July saw a record 98,332 visitors arriving in Fiji, the highest number for any 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 demand in the country remains strong, driven by robust tourism, rising income levels, and incoming remittances. Additionally, recent indicators suggest a gradual increase in investment activity.
The financial environment is favorable for growth, with banking system liquidity reaching $2.2 billion as of August 28, and lending rates at near-historical lows. Commercial bank lending has also been increasing, leading to an 11.6 percent expansion in private sector credit in July.
Annual headline inflation peaked at 6.8 percent in July, primarily affected by the costs of food and non-alcoholic beverages, alcoholic beverages, tobacco, narcotics, transport, as well as housing and utilities. As the impact of the 2023 VAT rate increase diminishes, inflation is anticipated to decrease to approximately 4.0 percent to 5.0 percent by the end of the year.
Foreign reserves were reported at around $3.7 billion on August 29, adequate for covering 6.0 months of retained imports of goods and services, with expectations that they will remain sufficient in the medium term.
The Reserve Bank of Fiji will continue monitoring incoming data and its implications for the economic outlook, adjusting monetary policy as necessary. In its August meeting, the RBF Board decided to keep the Overnight Policy Rate steady at 0.25 percent.
There are signs of economic momentum, particularly as visitor numbers exceed expectations and improvements are observed across various sectors.