Fiji’s annual inflation rate has declined to -3.8 percent in September, down from -3.5 percent in August, according to the Reserve Bank of Fiji (RBF). This decrease is largely attributed to lower prices in essential categories such as food, transport, and cooking fuel. Although there were price increases in alcohol, tobacco, and dining, the overall decline in consumer prices helped maintain a stable inflation environment.
The RBF has chosen to keep the overnight policy rate steady at 0.25 percent to support ongoing economic growth by keeping lending costs low. Governor Ariff Ali emphasized the importance of price stability combined with strong foreign reserves which currently sit at $3.9 billion, sufficient to cover more than six months of imports.
The economic landscape in Fiji displays resilience, with the country on track for a fourth consecutive year of growth. Visitor arrivals have seen a slight uptick, reaching 735,154, primarily due to tourists from the United States, Pacific Islands, Europe, and the UK, despite a drop in visitors from Australia, New Zealand, and Asia.
Key sectors such as timber and electricity production have reported gains. However, production in gold, sugar, and mineral water has faced sector-specific challenges that have affected output levels.
Strong domestic consumption continues, supported by rising incomes and the flow of remittances. Various indicators such as VAT collections, vehicle registrations, and electricity demand are all reflecting increasing consumer spending, indicating underlying economic strength.
Investment activity is on the rise, buoyed by the initiation of new construction projects and lower material costs. The RBF’s August Business Expectations Survey revealed that most local firms expect stable conditions in the coming 6 to 12 months, with plans to invest in machinery and infrastructure.
Private sector credit recorded an expansion of 9.6 percent in September, while liquidity levels remain stable at approximately $2.3 billion. Despite maintained optimism, Governor Ali cautioned that global risks—including tensions between the US and China, potential new tariffs, and the upcoming cyclone season—could impact Fiji’s economic prospects.
The RBF intends to closely monitor these developments and adjust its policies accordingly in order to uphold robust economic growth and stability moving forward. This proactive stance provides a sense of hope as Fiji navigates through the complexities of both domestic and global economic environments.