Brace yourselves as the Middle East conflict is likely to push fuel prices up which is expected to result in higher prices of goods and services.
Minister for Finance, Esrom Immanuel says higher fuel prices will affect transportation cost, production costs and household expenses, placing upward pressure on inflation and cost of living.
Immanuel says at the same time, if global economic conditions weaken, Fiji could face additional challenges through softer tourism demand, reduced export demand and slower investment flows.
He says they are particularly mindful of the potential impact on the tourism sector and national carrier Fiji Airways, as rising fuel costs and weaker global demand could affect travel and tourism activity.
The Finance Minister says tourism remains a key driver of Fiji’s economy, and any slowdown would have broader implications for growth, employment and foreign exchange earnings.
The government is closely monitoring the ongoing conflict in the Middle East and its potential economic and fiscal implications for Fiji.
Oil prices have increased significantly from around US$60 per barrel last year to approximately US$84 per barrel today.
Projections indicate that if the conflict continues and global oil supply disruptions intensify, prices could rise further to triple digits.
Immanuel says as a small island economy and a price taker in global markets, such increases would pose significant challenges for Fijian businesses, consumers and the broader economy.
The government is also closely observing how the conflict may affect the economies of our key trading partners, global stock markets and overall global economic stability.
These developments will influence Fiji’s trade, tourism flows, investment and overall economic growth.
Immanuel says while these risks are real, there is no need for panic.
He says Fiji currently has adequate foreign exchange reserves, which provide an important buffer against external shocks, social protection frameworks are flexible enough to respond with mitigating measures, if required, and the Government will continue to assess the situation carefully and will explore options to support consumers and businesses should global conditions worsen.
Immanuel says at the same time, it is important that we all remain vigilant and prepared.
