About 50 percent of Fiji’s consumption basket is made up of imported products, according to Finance Minister Professor Biman Prasad. He explained the difficulty in controlling import prices, which are determined by international markets.
Professor Prasad highlighted that Fiji’s major trading partners, including Australia, New Zealand, and the US, have all experienced significant inflation rates due to global supply chain disruptions stemming from the pandemic. “Australia’s inflation was 6.6 percent in 2022, the highest in 31 years, while New Zealand’s was 7.2 percent in 34 years. The US saw 8 percent inflation, the highest in 40 years,” he told Parliament.
Given Fiji’s trade links with these countries, higher import prices from these regions have had a significant impact, as about 50 percent of Fiji’s consumption basket consists of imported items. “I’m explaining this because our people need to understand, and many of them do. It also nullifies the misinformation some others have been spreading,” he added.
Professor Prasad provided figures for other comparable countries: Mauritius experienced 10.8 percent inflation in 2022, 7 percent in 2023, and is forecasted to have 5.9 percent in 2024. Vanuatu recorded 6.7 percent inflation in 2022, 12 percent in 2023, and is forecasted to see 6.7 percent in 2024. Tonga recorded 8.5 percent inflation in 2022, 10.2 percent in 2023, and is expected to have 5.4 percent in 2024.
Fiji’s inflation rate stood at 5.1 percent at the end of last year, peaking at around 7.1 percent in April this year. The current inflation rate in June 2024 is 6.7 percent, with projections to stabilize around 3 to 4 percent by the end of the year.
To assist people with the cost-of-living challenges, Professor Prasad said the government has maintained zero VAT on 22 essential items.