The Fijian economy grew by 20.0 per cent in 2022, surpassing the Macroeconomic Committee’s earlier estimate of 18.6 per cent with growth mainly driven by a strong services sector and net indirect taxes.
Reserve Bank of Fiji (RBF) governor and board chairman Ariff Ali said while the economy was on track for an 8 per cent growth this year, sectoral performances remained weak because of industry specific issues.
The inflation outlook for the year-end now stands around 6 per cent from the 2.8 per cent expected before the national budget.
According to the RBF this upward revision stems from higher duties and taxes announced in the national budget and the recent rebound in global crude oil prices.
Meanwhile risks to the growth outlook remain in the form of introduced taxes, continued migration of skilled workers, and the impact of climate change.
The RBF further said addressing the tourism industry’s current capacity constraints and prioritising private sector investment was crucial for sustainable growth.
Despite the risks to outlook financial conditions remain favourable for economic activity with growth in private sector credit and new lending primarily to households increasing.
Liquidity levels in the banking system remain adequate at $2.4 billion while foreign reserves stand at $3.6b as of 28 September, sufficient to cover 6.3 months of retained imports and is anticipated to remain adequate in the medium term.
Given the stable economic recovery, the RBF board agreed to maintain the Overnight Policy Rate at 0.25 per cent.
