The impact of the lockdown resulted in an increase of 3.7 per cent in food prices.
This was highlighted by the Reserve Bank of Fiji (RBF) in its economic review for the month of June, which also noted the increase in food prices was because of the impact of the lockdown on the supply of fresh fruits and vegetables and the pass-through of higher global food prices to consumer prices.
The RBF also cautioned that in the near term, inflationary pressures were expected to rise from increases in global crude oil and food prices, disrupted local supply chains because of stringent COVID-19 measures and increasing freight costs.
Meanwhile, inflation, according to the RBF, stayed -1.6 per cent for the third consecutive month in May as a result of lower prices of kava and alcoholic beverages.
In terms of sectoral performances, gold production increased by 8.6 per cent year-on-year, cumulative to May and was attributed to improved ore quality.
Timber output was also higher in the same period, underpinned by pine logs (y-o-y: +117.9 per cent) and woodchips (y-o-y: +87.7 per cent) driven by foreign demand, and mahogany (y-o-y: +51.3 per cent) production.
In contrast, annual contractions were recorded for visitor arrivals (-96.1 per cent) and electricity generation (-7.8 per cent) in the same period.
The RBF stated the daily rise in new COVID-19 cases continued to impede confidence and posed substantial downside risks to economic activity.
“Consequently, the domestic economy is envisaged to contract further this year. At the same time, the steady progress in local vaccination, with almost half of the adult population having already taken the first dose, could pave the way for the reopening of borders and a modest recovery next year,” stated the bank.
