Fiji is experiencing a post-pandemic economic revival, driven largely by the tourism sector. However, challenges such as room shortages and tighter financial conditions in key markets might affect the sustainability of this growth. Despite these challenges, it is anticipated that Fiji will receive a million visitors this year, contributing significantly to the GDP through sectors like Accommodation, Food Services, and Transport.
Beyond tourism, other sectors are also experiencing growth. Industries reliant on consumer demand, such as Wholesale and Retail trade, Information and Communication, and Manufacturing, are growing moderately. This growth is supported by remittances, with money sent from families abroad playing a crucial role. In recent times, temporary jobs in Australia and New Zealand have driven a surge in these money transfers, and it is believed that labor mobility programs from these countries will continue to bolster consumer demand in Fiji.
Private remittances, often termed the ‘family bank,’ have already surpassed the billion-dollar mark, providing a stable foundation for household service industries. Additionally, the new Tuvatu gold mine is set to ramp up production this year, further supporting the economy. The agriculture sector continues to be a reliable contributor, consistently adding to the GDP.
The construction sector also holds promise, despite currently being down 32% from its peak in 2019. Several large projects slated to begin in the latter half of the year are expected to boost the sector, with a high multiplier effect benefiting other areas of the economy.
Overall, a GDP growth of 3.4% this year is deemed achievable. However, long-term growth projections suggest a return to pre-pandemic routines, with GDP growing by approximately three percent annually. In the late 2020s, stronger growth is anticipated when tourism and its increased capacity once again become the primary drivers of jobs and GDP. The emergence of new industries, such as a fully-fledged BPO sector, could extend this economic upswing.
Dr. Kishti Sen, ANZ’s international Pacific economist, provided these insights. The views expressed in this article are his own and do not necessarily reflect those of this newspaper.