Output in Fiji’s natural resources sectors was significantly poor compared to the very strong performance in other sectors of the economy.
“Production in the natural resources sectors has been weak in the year to May,” said the Reserve Bank of Fiji (RBF) in its June economic review.
Double digit annual contractions were recorded in the production of mahogany (-39.4 per cent), woodchip (-36.0 per cent), sawn timber (-18.1 per cent), gold (-19.5 per cent) and mineral water (-10.4 per cent), due to what RBF said were “industry-specific issues around supply and demand”.
This, according to the Government in its 2023-2024 Budget delivered last week, was mostly due to slowdown in the economies of major trading partners and trends in international prices of sugar and gold.
In 2023, gold’s forecast export value is $72 million, down from over $100m the previous years, according to the budget documents, while performance from timber has been mixed, with this year’s production projected at $72.9m and is forecasted to decline over the next two years.
The depressed state of the natural resources sector was offset by stronger output in other major sectors.
Tourism arrivals docked an annual increase of 128.3 per cent in the first five months of this year to 327,392 visitors.
This was 1.7 per cent higher than the arrivals recorded in the comparable 2019 period. The higher tourist arrivals, employment opportunities, higher credit and an increased inflow of personal remittances supported robust consumer spending, as annual gains were noted in new consumption loans (16.0 per cent), inward remittances (25.2 per cent) and net value added tax collections (34.9 per cent).
Investment spending also improved relative to last year, as reflected in new investment lending growth (23.0 per cent) in the year to May, while domestic cement sales dropped slightly (-1.0 per cent) up to April due to lower market demand.
The central bank expects the expansionary fiscal stance of the 2023-2024 National Budget, together with a pick-up in investments once there is clarity in the taxes and fiscal policies, will positively contribute towards this year’s projected 8 per cent GDP growth.
