RBF says aggregate demand remains suppressed as more people have become unemployed or have had their wages and hours worked reduced

The Reserve Bank of Fiji says despite the domestic economy opening up under strict COVID-19 protocols, aggregate demand remains suppressed as more people have become unemployed or have had their wages and hours worked reduced.

Labour market conditions remain weak in tandem with the economic downturn.

As per the RBF Job Advertisements Survey, the number of jobs advertised plunged annually by 63 percent in the first half of the year, driven by reduced recruitment intentions across all major sectors except for the mining sector.

RBF says partial indicators of consumption spending such as Net VAT collections is down by 18.2 percent, new consumption lending by commercial banks has declined by 8.6 percent, new vehicle registrations are down by 8 percent and electricity consumption is down by 6.1 percent cumulative to June.

On the other hand, second-hand vehicle registrations rose by 120.4 percent over the same period.

Commercial banks’ new lending for investment purposes declined by 18.1 percent on an annual basis driven by lower lending to the real estate which is down by 20.3 percent and the building and construction sectors down by 12.1 percent.

The RBF says the economic uncertainty and mandatory COVID-19 protocols are anticipated to suppress investment plans further in the coming months.