THE central bank has forecast that total investment will improve significantly to about 26.0 per cent of gross domestic product this year.
Reserve Bank of Fiji acting governor Ariff Ali said the improvement in investment would be led by a combination of new and continuing public and private sector projects as well as Tropical Cyclone Winston rehabilitation related activity which would support job creation.
“Domestic economic activity remains firm on the back of expanding aggregate demand and better performances in the sugar and tourism industries,” said Mr Ali.
Meanwhile, the RBF board agreed to maintain the overnight policy rate at 0.5 per cent.
“The temporary upswing in inflation due to supply constraints following TC Winston and other adverse weather conditions last year has subsided.
“Headline inflation was 2.0 per cent for the second month in July while core inflation, excluding volatile items was lower at 1.7 per cent.”
Mr Ali said Fiji’s foreign reserves stood at $2,349 million, outperforming expectations and continued to reach records, boosted by tourism and other capital inflows.
He said the foreign reserves were sufficient to cover 5.8 months of retained imports.
According to Mr Ali, the central bank kept the high level of liquidity to support credit demand because there were no threats to its objectives in the near term.
He said the RBF would keep a close watch on domestic and international developments and align monetary policy as needed.
