Litia Cava 
Westpac Fiji has projected that Fiji’s year-end inflation is projected to remain stable at around 3.0 per cent.
The quarterly economic review highlights that while imported inflation has been the main driver of inflation in Fiji, domestic inflation has remained relatively stable, thanks to the government’s policy actions, such as zero-rated Value
Added Tax on basic household consumables and stricter monitoring of prices.
Westpac Fiji notes that inflation expectations in the medium term generally remain anchored, though some indicators have risen. In 2022, annual inflation averaged 4.3 per cent, driven by factors beyond the country’s control, such as supply chain disruptions caused by the COVID-19 pandemic and the Russia-Ukraine war.
However, with commodity and food prices easing globally, Fiji’s consumer prices have also eased over the past few months.
The report also states that the central banks of various countries have responded to the situation with a series of interest rate rises, which could exacerbate the squeeze on real incomes.
While the tightening of monetary policy is starting to cool demand and inflation, the full impact is expected to be realized much later.
Westpac Fiji emphasizes that commodity prices are subject to significant volatility, and the outlook going forward is mixed.
With no clear resolution in sight for the ongoing Russia-Ukraine war and other geopolitical tensions on the rise, the commodity market remains volatile.
