THE Fijian economy is expected to grow this year while the political climate, barring any traumatic upheavals, will remain largely stagnant and unchanged. According to the Asian Development Bank’s Pacific Economic Monitor, Fiji’s economy is likely to rise to 4.5% this year. Although the 2016 National Budget reduces incentives for the industry, tourism is likely to remain the primary driver of economic growth.
Visitor arrivals from Australia, New Zealand and the United States continue to climb with the Reserve Bank of Fiji noting in November 2015, continued growth of 8.9% in visitor arrivals up to October 2015. The continuing growth was buoyed by the weakening of the Fiji dollar against the New Zealand (4.1%) and Australian dollars (0.2 percent).
Despite lower international prices, the sugar industry will remain a major foreign exchange earner, with sugar production at close to 200,000 tonnes for 2015. However, with the ending of the European Union (EU) sugar quota in 2017, Fiji will have to vigorously pursue alternative markets to mitigate likely revenue loss.
Economic growth this year will also be further boosted with both foreign donorfunded and locally driven infrastructure development taking a greater hold with Fiji’s return to democratic rule. Higher remittances and improved private investment are also contributing to this year’s expected positive growth.