Political uncertainty, social and security concerns, and labour shortages could weaken investor and business confidence in Fiji, the Reserve Bank of Fiji (RBF) has warned.
In its October 2026 Economic Review released yesterday, the central bank highlighted growing domestic and international risks that could undermine the country’s economic growth prospects.
“Risks to the outlook remain significantly elevated,” the RBF stated.
“Domestically, labour supply constraints, social and security concerns and political uncertainty could dampen investor and business confidence.”
The central bank also warned that geopolitical tensions and rising global commodity prices continued to place upward pressure on the cost of living while threatening Fiji’s foreign reserves through higher import costs.
It said the possibility of severe dry conditions associated with El Niño posed another significant threat to key economic sectors.
“Furthermore, the risk of severe El Niño induced dry conditions and its impact on key sectors weigh on broader economic growth prospects.”
Despite these concerns, the RBF reported that domestic consumption remained favourable, supported by strong lending, higher vehicle registrations, increased net VAT collections and growth in wholesale and retail trade.
Consumption-related loans increased by 11.2 per cent in the year to September, driven by a 13.8 per cent rise in lending to private individuals.
Lending to the wholesale, retail, hotel and restaurant sectors increased by 10.7 per cent.
Net VAT collections also rose by 2.5 per cent, largely because of lower VAT refunds.
Vehicle registrations increased by 7.1 per cent in the year to August, with new vehicle registrations rising by 11.3 per cent and second-hand registrations increasing by 3.7 per cent.
However, the RBF cautioned that higher import duties on new and second-hand vehicles introduced in the 2026–2027 National Budget could reduce vehicle demand in the coming months.
Wholesale and retail trade activity also recorded growth during the first half of 2026, with nominal sales increasing by 10.1 per cent.
The increase was supported by higher sales income from fuel, vehicle parts and food, although the central bank noted that much of the growth reflected higher prices.
The RBF’s assessment indicates that while consumer spending and lending remain supportive of economic activity, political uncertainty, security concerns, labour shortages and external pressures continue to pose risks to Fiji’s economic outlook.
