Domestic economic activity indicators in January have been mainly favourable – RBF Governor

Reserve Bank of Fiji Governor and Chairman of the Board Mr. Ariff Ali says the domestic economic activity indicators in January have been mainly favourable.

Ali says following the opening of borders in December 2021, Fiji has since received 47,120 visitors in the two months, compared to almost no tourists in the preceding 18 months.

The RBF Governor says electricity production noted an annual growth while mineral water production grew strongly on the back of robust external demand.

In contrast, timber and gold output contracted due to planned mill closure and adverse weather conditions.

Ali says over the same period, consumption activity picked up as indicated by a growth in Net Value Added Tax collections, commercial banks’ new consumption lending and new vehicle sales - in line with eased COVID-19 restrictions, reopened borders and the recommencement of many businesses.

He says labour market conditions have also improved, shown by a growth in the number of jobs advertised and Pay As You Earn tax collections.

The RBF Governor says on the other hand, both cement production and sales declined in January, as uncertainty around the economic recovery continued to weigh on investor activity.

On the financial sector, Ali highlighted that higher foreign reserves inflows, quantitative easing and the drawdown of the RBF’s lending facilities have underpinned the increase in money supply in January.

The banking system liquidity stood at $2.07 billion, placing continued downward pressure on interest rates. Private sector credit, which noted a modest growth for the second month in January, was driven by the increase in lending to private sector business entities.