The Fijian economy is projected to expand by 8.2 per cent this year, an upgrade from the 8.0 per cent growth expected earlier.
Reserve Bank of Fiji governor and chairperson of the Macroeconomic Committee Ariff Ali said the upward revision reflected the “exceptional” recovery in the tourism industry.
He said up to October this year, a total of 772,172 tourists had visited Fiji, around 3.0 per cent higher than the same period in 2019.
“By the end of the year, visitor arrivals are expected to be 4.0 per cent higher than 2019 and reach a new record of 930,165 visitors,” Mr Ali said in a statement as he revealed the revision to GDP forecast for 2023-26.
“The spillover of higher tourist arrivals increased consumption spending and boosted aggregate demand.”
Mr Ali said investment spending had also been rising, although at a relatively gradual pace.
And in contrast, he added the natural resource sectors continued to show dismal performance and had been a drag on growth.
He said sugar, mineral water, gold and the forestry sector outputs noted annual contractions so far into the year because of industry-specific supply side issues.
“Over the medium term, economic growth is expected to return to trend. The current capacity constraints in the tourism industry is expected to keep annual visitor arrivals growth at around 3.0 per cent, slightly lower than the trend before the pandemic. “
However, Mr Ali said investment spending was expected to fast-track from next year, attributed to more clarity on taxes and incentives, pent-up demand from the pandemic and continuous improvements in the local business environment.
“As a result, the economy is projected to grow by 3.4 per cent in 2024 and a further 3.0 per cent in 2025-26.
“The services and industrial sectors are expected to be the leading drivers of growth while the primary sectors are expected to remain broadly flat.”
