Fijian economy expected to grow by 3.8% this year

The Reserve Bank of Fiji says after an estimated 2% growth last year, the Fijian economy is now expected to grow by 3.8% in 2017, an upward revision from the October 2016 forecast of 3.6%.

The Chairman of the Macroeconomic Committee and the Governor of the Reserve Bank of Fiji Barry Whiteside announced that with the exception of fishing, forestry and mining, most sectors are expected to improve this year with the services sector envisaged to drive economic activity.

Whiteside noted that overall, the sectors expected to lead the growth this year include manufacturing, financial and insurance activities, construction, wholesale and retail trade and transport and storage.

He adds that improved growth in the manufacturing sector will be underpinned by an expected rebound in cane production which in turn will mean higher manufacture of sugar.

Whiteside says added to this will be expected increases in the processing and preserving of poultry, dairy products, biscuits and mineral water production.

The construction sector is also anticipated to record a higher growth with major post Cyclone Winston related reconstruction work spilling over from 2016 into this year.

The wholesale and retail trade sector is also forecast to gain from increased sales of hardware and related building items.

The transport and storage sector is expected to benefit from additional flights and routes by Fiji Airways into Adelaide and San Francisco and the establishment of code sharing arrangements on the Singapore and Hong Kong route with Jet Airways.

Whiteside says the growth forecast for next year remains unchanged at 3%.

In 2019, the economy is envisaged to grow by 2.9%.

The RBF Governor says that despite higher annual inflation in April of 4.1% which was largely driven by supply shortages of agricultural produce and higher prices for yaqona after Winston, prices are expected to normalise towards the 3 percent forecast for the end of the year.  

Foreign reserves was around $2.24 billion as at today, equivalent to 6 months of retained imports of goods and non‑factor services and are expected to remain stable over the remainder of the year.