The Reserve Bank of Fiji has upwardly revised Fiji’s 2023 economic growth forecast to 8.2%.
The RBF had earlier said Fiji’s Gross Domestic Product (GDP) would grow by 8%.
RBF Governor and Chair of the Macroeconomic Committee, Ariff Ali says the upward revision reflects the tourism industry’s exceptional recovery. In October, arrivals were up 3% over the same period in 2019. He says by the end of this year, tourism arrivals are expected to reach a record 930,165 visitors.
Ali says investment spending has also been gradually rising, but that the “natural resource sectors continue to show dismal performance and have been a drag on growth. Sugar, mineral water, gold and the forestry sector outputs noted annual contractions so far into the year due to industry-specific supply side issues.”
Ali says the current capacity constraints in the tourism industry-that is the number of rooms available to tourists-is expected to keep annual visitor arrivals growth at around 3.0 percent, slightly lower than the trend before the pandemic, but that “investment spending is expected to fast-track from next year due to more clarity on taxes and incentives, pent-up demand from the pandemic and continuous improvements in the local business environment.”
The RBF projects the Fiji economy to grow by 3.4% in 2024 and a further 3% in 2025-26.
Ali notes downside risks include the economic slowdown in China, tight labour markets, rising commodity prices and elevated inflation.
The Macroeconomic Committee includes heads and senior representatives from the Ministry of Finance; Fiji Bureau of Statistics; Ministry of Trade, Co-operatives and Small and Medium Enterprises, Ministry of Tourism and Civil Aviation, Office of the Prime Minister; Investment Fiji; Fiji Revenue & Customs Service and the Reserve Bank of Fiji.