The Fijian economy is on track to grow for the fourth consecutive year this year by 3.4 per cent, following a 3.5 per cent expansion last year.
The Reserve Bank of Fiji (RBF) revised the growth forecast up marginally from the 3.2 per cent projected earlier in June.
RBF governor and Macroeconomic Committee chairman Ariff Ali said the economic backdrop had shifted since the last committee meeting, and cautioned that although signs of improvement were evident this year, downside risks to the outlook remained.
“Global uncertainties, softer tourism activity, and structural challenges remain key vulnerabilities,” Mr Ali said.
“As the cyclone season unfolds, heightened risks of severe weather events pose additional threats to economic activity, particularly in agriculture and infrastructure.”
On the external front, Mr Ali said the US tariff had “somewhat eased”, with a lower 15 per cent tariff imposed instead of the 32 per cent anticipated earlier, providing some relief to Fijian exporters.
He said data up to the 10 months this year had also been generally positive, with consumption activity remaining strong, sustained by higher incomes, remittances and government spending. He added the recent reduction in VAT rate had helped ease costs.
“The investment climate is improving, evidenced by an increase in the uptake of private and public sector construction projects reflected in the increased number and value of building permits issued, higher value of work done, and increased lending, supported by an accommodative monetary policy stance.
“Aligned with developments to date, some sectors are expected to note higher growth relative to earlier expectations.
“Growth in the forestry and logging sector has been revised upward driven by higher output from the timber industry, especially for pine and mahogany.”
He said the growth rate for the public administration sector was upgraded arising from the salary increment announced in the 2025-26 national budget, while strong consumption, retail activity and higher vehicle sales had lifted expectations for the wholesale and retail trade sector.
“Visitor arrivals have recovered following a decline in the first quarter. Based on current trends, Fiji is on track to achieve a third consecutive year of record visitor arrivals in 2025.”
He added the ongoing challenges in the sugar industry had resulted in a downward revision of cane and sugar output for the 2025 crushing season. He said the fishing sector was also forecast to decline because of changing weather patterns and declining stock.
Electricity, information and communication and real estate sectors, he said were expected to grow but at a slower pace.
“For the outer years (2026-2028), a broad-based forecast of 3.0 per cent is projected, with the economy returning to its long-term growth trajectory.
“Over this period, the service sectors are projected to remain the main drivers of growth, supported by contribution from the industrial and primary sectors.”
Mr Ali said they would continue to monitor global and domestic developments and review the macroeconomic projections in the second quarter of 2026.
