Year-to-date through April, Fiji has exported $713 million in merchandise and imported a staggering $2.1 billion, widening the trade deficit to $1.4 billion for the four months.
According to the latest quarterly report from Westpac, in April 2024, Fiji exported $186 million worth of merchandise while importing $589 million, resulting in a trade deficit of $403 million.
The report indicates that Fiji’s merchandise export sector has struggled to expand and has remained flat over the years, with exports averaging around $2 billion annually.
“In 2023, Fiji’s merchandise imports reached $5 billion, driven by high oil prices and freight costs, with 24.3 percent of imports being mineral fuels and lubricants.”
“On the positive side, Fiji’s tourism services exports and remittance inflows have performed remarkably well in bridging the trade deficit gap, maintaining foreign reserves at sustainable levels, and keeping the domestic monetary and financial sectors intact.”
“The financial sector is supported by adequate foreign reserves of $3.3 billion, enough to cover 5.4 months of retained imports (MORI), while the banking system’s liquidity has been ample at $1.9 billion, helping to keep 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 early into the Government’s new fiscal year before foreign reserves begin a downward trend.
While foreign reserves have stayed above historical levels, MORI fell sharply from 11.4 in late 2021 and currently stands at 5.4 as the price and size of imports have ballooned to almost $7 billion last year.