FIJI’S economy is set to grow for the fourth consecutive year, the Reserve Bank of Fiji (RBF) stated, following its latest decision to keep the Overnight Policy Rate at 0.25per cent for the fifth consecutive year as its twin monetary policy objectives – inflation and foreign reserves – remain “comfortable”.However, more risks are coming from the global economy rather than domestic, with
“spillovers from the increased trade frictions and higher global inflation” posing “a drag on potential growth.”
“The RBF will continue to assess incoming information and its implications on the outlook for inflation and foreign reserves and review monetary policy accordingly at its next board meeting on April 24, 2025,” RBF Governor Ariff Ali said.
Tourism slowed in the first two months of this year as visitor arrivals declined by 3.8 percent annually, driven by lower arrivals from key markets Australia and New Zealand, according to RBF.
Production from resource-based sectors was “broadly favourable” while strong consumption fuelled high domestic Value Added Tax collections as double-digit expansion in new consumption-related loans, high inward remittances and higher incomes supported consumption.
“Investment indicators such as commercial banks’ new loans for investment purposes, and building permits issued, signal an improvement in activity,” RBF stated.
Annual inflation eased to 1.4 per cent in February according to the central bank while foreign reserves stood at $3.5billion on March 27, 2025, adequate to cover 5.6 months of retained imports of goods and services and are projected to remain sufficient over the medium term.
NOTE: This article was first published in the print edition of the Fiji Times dated MARCH 31, 2025.
