Fiji exported $713 million worth of merchandise from January to April this year. However, the country imported an overwhelming $2.1 billion in the same period, leading to a trade deficit of $1.4 billion over those four months.
These figures were disclosed in the Westpac Banking Corporation’s Fiji quarterly economic update released this week.
The report highlighted that Fiji exported $186 million in merchandise in April alone, while imports for that month amounted to $589 million, resulting in a trade deficit of $403 million.
Westpac Fiji senior economist Shamal Chand noted that Fiji’s merchandise export sector has struggled to grow and has remained relatively unchanged over the years, with exports averaging about $2.0 billion annually.
In 2023, Fiji’s merchandise imports reached $7.0 billion, driven largely by high oil prices and freight costs, with mineral fuels and lubricants accounting for 24.3 percent of these imports.
“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,” said Chand.
He added that the financial sector was bolstered by adequate foreign reserves of $3.3 billion, enough to cover 5.4 months of retained imports. The banking system’s liquidity stood 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 the foreign reserves begin a downward trend.”
Chand pointed out that while foreign reserves have remained above historical levels, months of retained imports have sharply declined from 11.4 in late 2021 to the current 5.4 months due to the substantial increase in the price and volume of imports, which nearly reached $7.0 billion last year.