CONSUMPTION spending continues to remain robust as suggested by various partial indicators, the central bank has revealed.
Reserve Bank of Fiji (RBF) highlighted in its July economic review that cumulative to June this year, new (27.3 per cent) and second-hand (18 per cent) vehicle registrations grew strongly.
It noted that commercial banks’ new consumption-related credit expanded, by 7.8 per cent in the same period.
Moreover, the projected 8.5 per cent growth in retail sales as per the RBF’s June 2016 Retail Sales Survey further accentuates the strong consumption spending to date.
It says investment spending showed mixed results in the year so far, but is expected to grow further for the year.
While domestic cement sales rose (10.6 per cent) annually cumulative to June, commercial banks’ new investment lending contracted (-22.7 per cent) in the same period.
The RBF’s June 2016 Business Expectations Survey highlighted businesses were largely optimistic on planned investment in plant and machinery and buildings.
Looking ahead, it stated Government’s planned capital spending for post cyclone reconstruction was expected to boost investment in the new fiscal year.
Domestically, notwithstanding the Severe Tropical Cyclone Winston/weather-related contractions, it added real sector activity remained positive in the year to date.
Additionally, it forecasted the 2016 growth projection is expected to be slightly upward based following the announcement of an expansionary budget for the new fiscal year.
Visitor arrivals have remained strong in the year to May (5.2 per cent), influenced by higher tourist numbers from New Zealand and China.
In addition, it said capital investments were yielding benefits for the Vatukoula Gold Mines Ltd and underpinned stronger gold output (8.7 per cent) in the first six months of 2016. In contrast, it added, lower electricity consumption (-1 per cent), woodchip (-44.8 per cent), pine log (-40.4 per cent) and mahogany (-11.2 per cent) production were affected mainly by supply-related factors in the review period.