Fiji’s economic outlook indicates a period of moderation following a robust recovery from the pandemic, according to the latest Westpac Fiji Economic Update. After an impressive growth rate of 17.7 percent in 2022 and 9.4 percent in 2023, growth is set to slow to 3.5 percent in 2024. The economy is projected to expand by an additional three percent in 2025, stabilizing around 3.3 to 3.4 percent in the medium term, which aligns closely with Fiji’s historical growth averages.
The report underscores the transition from recovery-driven momentum to more sustainable economic growth, bolstered by key sectors such as tourism and remittances. Nevertheless, anticipated growth for 2025 has been tempered by expectations of flat visitor arrivals and reduced remittance projections, revised from ten percent to five percent. While August showed strong tourist numbers, a decline was seen in September, with similar trends expected to persist for the remainder of the year.
Inflation is predicted to turn negative in 2025, averaging –1.3 percent, primarily attributed to falling food and transport costs. It’s expected to gradually return to positive levels by 2026, rising to between 2.5 and 2.8 percent as price pressures ease.
Despite these challenges, remittances remain a vital support for many households, providing steady income and foreign exchange. Additionally, population growth is expected to stabilize, which should bolster consumption and stimulate recovery in the labor market over the medium term.
The medium-term economic outlook is optimistic, supported by extensive infrastructure investments. Energy Fiji Limited is poised to invest nearly $2 billion in renewable energy infrastructure over the next five years to meet growing energy demands. Furthermore, significant hotel developments in Suva and Nadi will provide support to both the tourism and construction sectors.
While government spending remains a critical factor in stimulating demand, the forecast for growth at 3.0 percent in 2025 reflects a cautious yet balanced perspective shaped by recent trends in tourism and remittance flows. Overall, the resilience of Fiji’s economy amidst global challenges provides a hopeful outlook for sustained growth, showcasing the potential to adapt and diversify in the face of changing global dynamics.