As of April, Fiji has exported $713 million in merchandise while importing a significant $2.1 billion, leading to a trade deficit of $1.4 billion for the first four months of the year.
According to the latest quarterly report from Westpac, in April 2024 alone, Fiji’s exports were valued at $186 million, whereas imports amounted to $589 million, creating a trade deficit of $403 million.
The report indicates that Fiji’s merchandise export sector has struggled to grow, maintaining an average of around $2 billion annually over the years.
In 2023, Fiji’s merchandise imports hit $5 billion, influenced by high oil prices and freight costs, with 24.3 per cent of imports consisting of mineral fuels and lubricants.
On a positive note, Fiji’s tourism services exports and remittance inflows have significantly helped mitigate the trade deficit, keeping foreign reserves at sustainable levels and maintaining stability in the domestic monetary and financial sectors.
The financial sector enjoys strong support with foreign reserves standing at $3.3 billion, sufficient to cover 5.4 months of retained imports (MORI). The banking system also maintains ample liquidity at $1.9 billion, making the weighted average lending rate affordable.
Foreign reserves have climbed by 4.9 per cent since late April, buoyed by the Government’s overseas loan drawdowns. This growth is expected to persist into the new fiscal year before a likely downward trend in foreign reserves.
Although foreign reserves remain historically high, MORI has sharply declined from 11.4 in late 2021 to the current 5.4, as the cost and volume of Fiji’s imports swelled to nearly $7 billion last year.