Inflation is projected at 6 per cent by the end of the year, a sharp increase from the 2.8 percent expected early this year.
In its September Economic Review released early this month, the Reserve Bank of Fiji said the upward revision is based on higher duties and taxes.
“The inflation outlook for year-end is now around 6 per cent from the 2.8 per cent expected before the national budget. This upward revision stems from higher duties and taxes announced in the national budget and the recent rebound in global crude oil prices,” the review read.
Foreign reserves, it stated, remain comfortable at $3.56 billion, “sufficient to cover 6.3 months of retained imports as of September 29, and is anticipated to remain adequate in the medium term.”
The central bank has kept its economic growth projection for the end of the year at 8 per cent, with risks to the outlook likely to be in the form of introduced changes to the corporate tax and VAT rates, the continued migration of skilled workers, and the impact of climate change on the domestic front while likely sources of risks from the global economy include elevated core inflation, growing costs of international travel, rising commodity prices, export restrictions, geopolitical tensions, and high-interest rates.
“The El Nino phenomenon is a risk that may exacerbate some of these factors further, thus impacting Fiji’s export performance, raising import bills, and lowering tourism revenue,” RBF stated.
