Fiji’s merchandise trade balance weakened by 77.7 per cent to $458.9 million in the year to September, as higher domestic demand and rising import prices led the annual growth in imports (55.8 per cent) rising more sharply than the 27 per cent growth in exports.
According to the Reserve Bank of Fiji’s December economic review annual inflation which has persisted above 5.0 per cent since May 2022 moderated to 5.2 per cent in November from 5.4 per cent in the previous month but still higher than the 1.5 per cent a year ago.
It said higher food and fuel prices were the major contributors to the inflation outcome over the year, both of which constitute a significant share of imported inflation which stood at 8.0 per cent relative to domestic inflation of 4.4 per cent.
On a monthly basis, inflation declined for the third consecutive month to -0.2 per cent.
The RBF said the level of foreign reserves were comfortable at $3,426.3m, sufficient to cover 6.9 months of retained import cover, underpinned by higher tourism receipts, inward remittances and Government loan drawdown, adding that foreign reserves were anticipated to remain stable in the near to medium term.
In terms of risks to the outlook, the central bank said risks mainly emanate from the external front.
“Further USD tightening, cross border tensions and more frequent commodity price shocks pose acute challenges to the global growth outlook. Domestically, natural disasters particularly during Fiji’s cyclone season could weigh significantly on economic outcomes,” it said.
