Government is closely monitoring the ongoing conflict in the Middle East and its potential economic implications, with concerns that rising global oil prices could eventually affect the country’s tourism industry.
Minister for Finance, Commerce and Business Development Esrom Immanuel said the Government was keeping a close watch on global developments, particularly the steady rise in fuel prices.
Oil prices have already increased from around US$60 per barrel last year to about US$84 per barrel today, with projections suggesting prices could climb into triple digits if the conflict intensifies and global supply chains are disrupted.
“As a small island economy and a price taker in global markets, such increases would pose significant challenges for Fijian businesses, consumers and the broader economy,” Mr Immanuel said.
He said higher fuel prices would raise transportation and production costs while also increasing household expenses.
“Higher fuel prices will affect transportation costs, production costs and household expenses, placing upward pressure on inflation and the cost of living,” he said.
Mr Immanuel warned that global instability could also affect travel demand, which is critical to Fiji’s economic performance.
“We are particularly mindful of the potential impact on the tourism sector and national carrier Fiji Airways, as rising fuel costs and weaker global demand could affect travel and tourism activity,” he said.
Tourism remains one of Fiji’s largest economic drivers, supporting thousands of jobs and generating significant foreign exchange earnings.
The Government is also monitoring the broader impact of the conflict on Fiji’s key trading partners, global financial markets and investment flows.
“These developments will influence Fiji’s trade, tourism flows, investment and overall economic growth,” Mr Immanuel said.
Despite the uncertainties, he reassured the public that Fiji remains in a stable position.
“While these risks are real, there is no need for panic. Fiji currently has adequate foreign exchange reserves, which provide an important buffer against external shocks,” he said.
Mr Immanuel added that the Government’s social protection systems remain flexible and could be activated to support households and businesses if global conditions worsen.
“Government will continue to assess the situation carefully and will explore options to support consumers and businesses should global conditions deteriorate,” he said.
He stressed that the situation underscores the importance of prudent economic management and preparedness.
“Government will continue to keep the public informed as the situation evolves,” Mr Immanuel said.
