Economy continues to perform well, headline inflation at 4% in Oct – RBF

Despite the slowdown in the global economy, the Reserve Bank of Fiji states that the Fijian economy continues to perform well and is projected to grow by 8.2 percent this year, following a robust 20 percent expansion in 2022 thereby restoring the Gross Domestic Product to pre-pandemic levels.

And the good news is that crude oil prices fell to US$87.41 per barrel as OPEC3 and the United States ramped up production, while world food prices index (FAO) declined by 10.9 percent, led by the fall in prices for cereal and rice, which more-than-offset the increase in dairy prices.

Headline inflation stood at 4 percent in October as higher prices were noted across most categories, with food and non-alcoholic beverages, transport, and restaurants and hotels being the major drivers.

The RBF says the impressive growth in the economy is reflective of the strong recovery in the tourism industry as visitor arrivals cumulative to October totalled 772,172 visitors, 55.3 percent and 2.7 percent higher than the corresponding period in 2022 and 2019, respectively.

With the growing tourist demand, the hotels average daily room rate has also picked up significantly and exceeded pre-pandemic levels, leading to higher revenue earned from rooms sold.

Weak performances were noted in the primary and natural resource sector due to industry-specific issues. Cane yield was down by 8.1 percent and sugar production (down by 13.6 percent) recorded annual contractions as at 30th October underpinned by cane supply disruptions and operational issues.

The RBF says consumption activity has been strong supported by the positive flow-on effects from increased tourism activity, rising incomes as reflected by the rise in Pay As You Earn tax collections by 20.1 percent and higher remittance inflows (21.8 percent) cumulative to October.

Partial indicators for consumption such as net VAT collections (27.6 percent) and new lending for consumption purposes (11.2 percent) recorded annual increases up to October.