Fiji has exported $713 million worth of merchandise from January to April this year. However, the country imported a staggering $2.1 billion in the same period, widening the trade deficit to $1.4 billion for those four months.
The statistics were released in the Westpac Banking Corporation’s Fiji quarterly economic update this week. The report also noted that Fiji exported $186 million in merchandise in April this year alone, while it imported $589 million, resulting in a trade deficit of $403 million.
Westpac Fiji senior economist Shamal Chand said Fiji’s merchandise export sector had struggled to expand and had remained flat over the years, with exports averaging around $2.0 billion annually. He said in 2023, Fiji’s merchandise imports reached $7.0 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 remittances 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,” Mr Chand said.
Meanwhile, he said the financial sector was supported by adequate foreign reserves of $3.3 billion, enough to cover 5.4 months of retained imports, while the banking system’s liquidity had 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 Government’s new fiscal year before the foreign reserves begin on a downward trend,” Chand noted.
He said that while foreign reserves had stayed above historical levels, months of retained imports fell sharply from 11.4 in late 2021 and now stands at 5.4, “as the price and size of our imports have ballooned to almost $7.0 billion last year.”