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Fiji
Economy
Fiji’s economic forecast for the year looks favourable.
The positive influence on the international front is led by
recovery in the US economy. Similarly, the economies of all
our major trading partners are anticipated to record positive
growth, due to the strong recovery in the US and Euro zone.
Furthermore, growth prospects for selected non-Japan Asia
(China, Hong Kong & Singapore) are also optimistic.
Domestically, there are indications that the Fiji economy
will achieve its growth projection of 4.1 percent for 2004
after expanding by an estimated 5.0 percent in 2003. The main
impetus to growth in 2003 was the wholesale & retail trade
and restaurants & hotel sectors. In addition, notable
contributions were from the transport, storage & communication;
manufacturing; and construction sectors.
Sectoral performances are expected to improve further into
the year. Results of the Reserve Bank’s December 2003
Retails Sales Survey, project a further growth of 8 percent
in retail sales over the 13 percent expansion estimated for
2003. Higher incomes are supporting domestic demand, with
a rise in the number of new taxpayers recorded in the community,
social & personal services; manufacturing, finance, insurance,
real estate & business services; and wholesale, retail
trade, restaurants & hotels sectors.
Consumption spending is expected to remain buoyant in 2004.
Over the first quarter of 2004, strong consumption growth
continues to be supported by low commercial bank lending rates,
favourable labour market conditions and the resulting growth
in personal incomes.
Growth in investment is anticipated to remain steady in 2004.
Although Government’s capital expenditure is projected
to decline, some of the shortfall is expected to be met by
private sector investment. A number of large projects are
already under way and additional projects announced in recent
weeks are expected to commence soon. Moreover, in line with
the increased activity in the building and construction sector,
loans and advances to the sector continue to register a marked
increase.
Inflation stood at 2.8 percent in January 2004, down from
4.2 percent in December 2003. Over the month, consumer prices
rose by 0.7 percent, mainly attributed to higher prices of
services, heating & lighting, food, durable household
goods, miscellaneous items, alcoholic drinks & tobacco
and transport. This was partially offset by lower prices of
clothing & footwear and housing. Year-end inflation is
projected to fall to around 3 percent.
Growth in the money and credit aggregates accelerated on an
annual basis to December 2003, shadowing the robust performance
in the real sector.
Broad money grew by 25.2 percent, underpinned by growth in
all its components. Private sector credit rose by 16.8 percent
and has been rising for the fifteenth consecutive month, largely
driven by higher commercial bank lending to private individuals
(for housing & consumption purposes), building & construction
and manufacturing sectors. Movements in commercial bank interest
rates were mixed. The weighted average lending rate rose marginally
to 7.39 percent, while time deposits and saving deposits rate
declined by 7 basis points and 3 basis points respectively
to 1.70 and 0.45 percent.
On the external front, latest Overseas Exchange Transactions
(OET) data, cumulative to December 2003, shows that exports
fell by around 8 percent, while merchandise imports rose by
around 12 percent.
Fiji’s current foreign reserves are sufficient to cover
3.1 months of imports of goods and non-factor services or
4.6 months of imports of goods only.
Source:
Reserve Bank of Fiji – www.rbf.gov.fj
Bureau of Statistics – www.spc.int/prism/country/fj/stats
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