RISKS to inflation outlook are still on the horizon despite staying in negative territory most of this year as the Reserve Bank of Fiji (RBF) maintains Overnight Policy Rate (OPR) at its lowest for the sixth consecutive year.
Announcing OPR at 0.25 per cent this week, RBF said its accommodative monetary policy stance is in line with its dual mandate of stable inflation and maintaining an adequate level of foreign reserves.
“Annual headline inflation fell further to -3.5 per cent in August, from -1.5 per cent in July and was significantly lower than the 3.8 per cent a year ago,” it stated.
“The inflation outcome reflected the impact of price decline from the VAT reduction, along with the bus fare subsidy that came into effect from August 1.
“Notably, lower prices were recorded in the food and non-alcoholic beverages, transport, cooking gas and other fuels categories which outweighed price increases in the alcoholic beverages, narcotics & tobacco and the restaurants & hotels categories.
“However, risks to the inflation outlook remain, mainly due to the ongoing geopolitical tensions which could affect global commodity prices and freight costs, as well as the approaching cyclone season.”
Fiji’s foreign reserves, “comfortable at approximately $3.8 billion (as of September 25, 2025)”, was sufficient to cover six months of retained imports of goods and services, RBF added.
Growth this year is on track for the projected 3.2 per cent against a backdrop of mixed sectoral performances due to industry specific issues, according to RBF Governor Ariff Ali.
He said Fiji Bureau of Statistics data showed that the Fijian economy grew by 3.5 percent in 2024, after a revised growth of 9.4 per cent in 2023.
—
Note: This article was first published under the headline: Inflation risks linger in Page 16 of the print version of The Fiji Times dated Saturday, September 27, 2025
