Year-to-date through April, Fiji has exported $713 million in merchandise and imported an astonishing $2.1 billion, resulting in a trade deficit of $1.4 billion over the four-month period.
According to Westpac’s latest quarterly report, in April 2024, Fiji exported $186 million worth of merchandise while importing $589 million, leading to a trade deficit of $403 million.
The report highlights that Fiji’s merchandise export sector has been struggling to expand, remaining stagnant over the years, with exports averaging around $2.0 billion annually.
In 2023, Fiji’s merchandise imports reached $5 billion, largely driven by high oil prices and freight costs, with mineral fuels and lubricants accounting for 24.3 percent of imports.
On a positive note, Fiji’s tourism services exports and remittance inflows have significantly helped in bridging the trade deficit gap, maintaining foreign reserves at sustainable levels, and keeping the domestic monetary and financial sectors stable.
The financial sector is supported by adequate foreign reserves of $3.3 billion, which is sufficient to cover 5.4 months of retained imports (MORI). Meanwhile, the banking system’s liquidity has remained ample at $1.9 billion, aiding in keeping the weighted average lending rate affordable.
Foreign reserves have increased by 4.9 percent since late April, driven by the Government’s overseas loan drawdowns.
This trend is expected to continue into the Government’s new fiscal year before foreign reserves begin a downward trajectory.
While foreign reserves have remained above historical levels, MORI has decreased sharply from 11.4 in late 2021 and currently stands at 5.4, as the price and volume of imports ballooned to nearly $7 billion last year.