The Reserve Bank of Fiji in its latest economic review has stated that the annual headline inflated rate picked up from 5.8 percent in May to 6.7 percent last month.

Governor Ariff Ali says this was underpinned by higher prices in the food and non-alcoholic beverages, alcoholic beverages, tobacco and narcotics, transport, housing utilities, and restaurants categories.

Ali says while inflation is expected to moderate from next month after the impact of the VAT increase drops-out from the base effect, it is forecast to remain around four to five 5 percent by end 2024.

Ali says as of yesterday, foreign reserves stood at $3.5 billion.

RBF Governor Ariff Ali

He indicated that after weighing in the current economic conditions and risks, the medium-term outlook for inflation and foreign reserves is stable.

Therefore, the current monetary policy setting will be maintained at 0.25 percent for now to support economic growth.

The Governor says the financial sector remains conducive for growth with the low interest rates supporting private sector credit growth which accelerated to 11.3 percent in June, the highest since July 2017.

Ali, highlights the Fijian economy has been largely driven by consumption activity supported by the higher tourist demand, personal remittances and improved disposable incomes resulting from current tight labour market conditions.

Investment activity is slow-paced but recent forward-looking indicators point to a gradual improvement.

Going forward, Ali says the initiatives announced in the fiscal year 2024-25 National Budget is expected to stimulate economic activity.