Ritika Pratap 
Reserve Bank of Fiji Governor Ariff Ali says the tourism-led economic recovery has kept pace in the country.
Ali further states that the recently announced 2023–24 national budget will provide additional stimulus and support economic activity going forward.
The Governor adds that the recovery in tourism coupled with improvements in labour demand and income, continued growth in personal remittances, and new consumption loans have underpinned the steady growth in consumer spending so far into the year.
Aerial shot of Suva City.
Additionally, Ali says investment spending has improved relative to last year and is expected to pick up further in the second half of the year following the announcement of the national budget.
In contrast, production in the natural resources sectors such as forestry, mining, and mineral water has noted annual contractions so far into the year due to industry-specific supply-side issues and lower demand.
On the financial sector, the Governor highlights that there has been a continuous expansion in private sector credit activity while the more than ample banking system liquidity has kept lending rates at historically low levels.
Reserve Bank of Fiji.
Overall, Ali says the financial system remains stable with adequate capital and provisioning.
On the RBF’s twin monetary policy objectives, Ali states that “headline inflation has been on a declining trend and moderated to 0.8 percent in May from the 1.4 percent recorded in April.
This is mostly due to lower fuel and kava prices.
However, given the recently announced tax increases in the budget, inflation is expected to rise from August onward and register at 4.7 percent at the end of the year before subsiding to 2.5 percent by the end of 2024.
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