The Reserve Bank of Fiji (RBF) has cautioned that the ongoing US-Iran conflict could weigh on Fiji’s economic outlook, with risks emerging through higher fuel prices, inflation, supply chain disruptions and potential impacts on tourism.
In a statement, the RBF said as a price taker, Fiji remains vulnerable to prolonged periods of elevated global oil prices, which could drive up the cost of living, increase business expenses and dampen household spending and investment.
The Bank noted that global growth prospects have weakened, with the International Monetary Fund revising its 2026 outlook to 3.1 per cent, warning of further downside risks if tensions persist and oil prices rise sharply.
It added that volatility in oil markets could also affect travel sentiment and increase airfares, potentially reducing visitor arrivals in the months ahead.
Given these external pressures, the RBF said Fiji’s GDP growth outlook for 2026 is now downward biased, despite a strong start to the year with the economy expanding by 7.0 per cent in the first quarter.
On the domestic front, consumption activity is showing signs of moderation, although it continues to be supported by rising household incomes, strong remittance inflows and increased employment.
Investment activity, however, remains positive, underpinned by growth in new lending, construction-related imports and easing building material prices.
Looking ahead, the RBF highlighted several constraints to investment, including rising fuel and freight costs, shortages of skilled labour and a more cautious “wait-and-see” approach by businesses in an election year.
