Press Release No. : 09/2023
Date : 26 May 2023
The Fijian economy continues to benefit from the strong rebound in tourism and its positive spill-over effects to other sectors of the economy.
Visitor arrivals have increased steadily since the re-opening of borders and are on track to returning to prepandemic levels. In the first four months of 2023 visitor arrivals totalled 252,245 visitors, slightly higher than the arrivals recorded in the same period in 2019. This outcome was driven mainly by higher arrivals from our traditional source markets of Australia, New Zealand and North America contributing 82.5 percent to total visitor arrivals. Industry feedback reveals that the average hotel occupancy rate and revenue earned from rooms sold have outpaced pre-pandemic levels.
In tandem with the robust growth in the economy, the job market continued to improve. The number of job vacancies rose by 23.6 percent in the first four months of 2023, as recruitment intentions picked up in most sectors. However, the strong demand for labour is also underpinned by businesses filling up vacant positions from workers leaving Fiji through migration. The positive effects from improved labour market conditions, higher remittances and upswing in credit are reflected in the significant pickup in consumption activity. Partial indicators for consumption, such as net VAT collections, new lending for consumption purposes and electricity consumption have recorded annual gains so far in the year. Similarly, investment activity has exhibited signs of a stable but slower recovery as new lending for investment purposes rose.
Based on the robust performance to date and positive industry sentiments, visitor arrivals are expected to return to 2019 level this year. This coupled with recent economic data, the growth projection for the Fijian economy in 2023 is revised upward to 8.0 percent from the 6.0 percent envisaged in November 2022. The key sectors contributing to the upward growth projection are the accommodation & food services, transport & storage, agriculture, manufacturing, wholesale & retail sales, finance & insurance, administrative services, construction and net indirect taxes.
For 2022, given the better-than-expected rebound in tourism and related sectors, the Fijian economy is estimated to have grown by 18.6 percent, higher than the 15.6 percent previously projected. The service sector and net indirect taxes contributed the most to the revised growth estimate. In 2024 and 2025, Fiji’s economy is forecast to return to the pre-pandemic trend and grow by 3.8 percent and 3.0 percent, respectively.
Despite the upward revision to the growth projection for this year, risks to the outlook are tilted to the downside. The global headwinds are from the continued geopolitical tensions, rapid interest rate hikes in advanced economies and the possibility of global recession. Domestic headwinds include uncertainty surrounding tax policies and the extent of fiscal consolidation in the upcoming national budget, high emigration, climate change, and natural disasters.
The next review of macroeconomic projections is scheduled for the last quarter of 2023.
RESERVE BANK OF FIJI
For further details, please contact:-
Communications Office
Telephone: (679) 3223 381 Email: info@rbf.gov.fj
Mr Mervin Singh – Manager Corporate Communications
Telephone: (679) 3223 229 Email: mervin@rbf.gov.fj