Fiji has recently experienced a significant decline in its consumer price index (CPI), marking a notable deflationary trend for seven consecutive months. The headline CPI for September 2025 recorded a year-on-year decline of 3.8%, contributing to an average annual inflation rate of -0.9%, which underscores an extended period of decreasing prices.
The chief economist at Westpac Fiji, Shamal Chand, attributed this deflation primarily to an 8.2% decrease in prices of food and non-alcoholic beverages, alongside an 8.1% drop in transport costs, largely owing to lower fuel and spare parts prices. Despite the yearly deflation, the CPI showed a slight rise of 0.3% in September, hinting that underlying inflationary pressures may be on the increase, particularly for food items such as meat, dairy, oils, and beverages. This trend has been observed in other economies worldwide as well.
Chand noted that the current economic landscape reflects transformational changes, particularly as Fiji’s Bureau of Statistics (FBoS) rebased the CPI to a base year of 2019. This adjustment aims to align the index with consumption patterns observed just before the pandemic. The rebase revealed that inflation peaked during the post-pandemic recovery phase, hitting 8.2% year-on-year in August 2022, and confirmed earlier discussions regarding the intensity of price pressures at that time.
The updated CPI basket now includes 309 items, a reduction from the previous count of 349, which also saw a shift in expenditure weights. There was a notable increase in expenditure on alcoholic beverages, tobacco, and narcotics, reflecting higher household spending in these categories.
Westpac’s publication, Westpac Wave, summarizes that while Fiji is currently seeing deflation, the potential for inflation to re-emerge in coming months is present, primarily driven by changing dynamics in global fuel prices and domestic market shifts. The inflationary pressures combined with the recent rebase suggest that Fiji’s economy is in a transitional phase, with expectations for a careful monitoring of price changes and responsive government measures that can further enhance the economic well-being of its citizens.
This ongoing trend provides a glimpse of hope, indicating a path towards economic stability that can lead to more affordable prices for essential goods as consumers adjust to the evolving economic climate.