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The World Bank in its latest economic update says inflation in Fiji has generally been much lower than elsewhere in the world owing to price controls and various mitigation measures.

It says the consolidation of nine percent and 15 percent VAT rates in August 2023, and higher import prices and tariff rates led to a 5.1 percent year on year headline inflation in December, the highest in the last decade.

However, it fell to 3.6 percent in January.

World Bank says this is partially due to the diminishing impact of tax changes and lower global food prices.

It says the Fijian economy has fully recovered with a 28 percent growth during 2022-2023.

It says this was achieved on the back of a swift tourism rebound of four percent above 2019 levels by the end of 2023.

Moreover, the World Bank says the countercyclical fiscal response to the pandemic and a pick-up in domestic demand contributed to the strong recovery.

It says about 50 percent of the 2022 and 2023 growth came from accommodation, transport, manufacturing, wholesale, retail and finance sectors.

This quick recovery is estimated to have reduced poverty by upper middle income countries standards from 67.2 percent in 2021 to 52.1 percent in 2023.

It says foreign reserves remained at a comfortable level of 5.7 months of retained imports as of the end of 2023.

The fiscal deficit declined to 5.1 percent of GDP in 2023 from an average of
11.6 percent in 2020-22 due to high tax buoyancy and lower capital transfers.

Gains from revenue measures introduced in 2023 were around 3.3 percent of GDP but were partly offset through higher public spending.

The deficit was financed through external concessional and domestic borrowing.

Fiji’s Public debt fell to 80.6 percent of GDP in 2023 because of declining primary balance and high growth.