Fiji’s 2024 economic growth projection has been revised downwards to 2.8 per cent as the ongoing exodus of skilled workers, high cost of living and dampened government spending toned down earlier optimism of a 3.4 per cent growth in Gross Domestic Product this year.
“Despite the buoyant inflow of remittances and higher incomes, growth in consumption spending has moderated largely due to the notable number of Fijian citizens migrating abroad, most of them whom are skilled and semi-skilled workers, around 15 per cent of the total labour force,” the Reserve Bank of Fiji stated on Thursday.
“The outturn in the economy has also been impacted by elevated cost of living as inflation soared to 7.1 percent in April 2024 and lower than expected Government expenditure, the latter affected by capacity constraints.
Investment activity was “slow-paced due to several challenges, such as high building & material costs, skill shortages and red tape.”
“Apart from the surprisingly strong growth in tourist arrivals up to April and higher gold output due to the start of production at Tuvatu Gold Mine, other sector outcomes are performing below par,” RBF stated.
The downward revision did not come as a surprise to ANZ’s senior Pacific economist Kishti Sen, who has long predicted Fiji’s inability to move beyond the three per cent mark.
“We for some time believed that the optimism following the remarkable post-pandemic rebound would be short-lived,” Mr Sen told this newspaper.
“In November last year, we said that Fiji should get ready for a soft middle decade because international tourism had reached its peak and was not in a position to do all the heavy lifting.
“That said, other industry sectors are stepping up to keep the economy chugging along at three per cent per year. That’s still a good outcome because that’s what we had prior to COVID. And stronger growth will emerge once the vaunted investment pipeline goes to commencement. I’m very confident about that,” Mr Sen said.
The crystal balls from other parties on Fiji’s growth:
- Asian Development Bank: 3% in 2020, 2.7% in 2025 –Asian Development Outlook April, 2024.
- Westpac: 2.5% in 2024, 3% in 2025 – WESTPAC WAVE, Fiji Quarterly Economic Update May 2024
- International Monetary Fund: 3% in 2024,2.7% in 2025 – End of Article IV, 2024 Mission press release, March 2024.
- World Bank: 3.6% in 2024, 3.3% in 2025 – Pacific Economic Update, March 2024
