Fiji’s economic growth is expected to moderate over the medium term following a strong post-pandemic rebound.

Westpac’s Fiji Economic Update and Outlook reflects more of a balanced assessment of both upside and downside risks, with forecasts now based on the rebased 2019 GDP levels.

After expanding by 17.7 percent in 2022 and 9.4 percent in 2023, real GDP growth slowed to 3.5 percent in 2024 and Fiji’s economy is expected to grow by a further three percent in 2025.

The medium-term growth is expected to stabilise at around 3.3 to 3.4 percent, the historical average.

The Outlook says this marks a transition from recovery-driven momentum to more sustainable growth, supported by tourism, remittances, and domestic activity.

The lower-than-historical average growth expected in 2025 is largely due to assumptions of no growth in visitor arrivals and an upward revision of prior year’s growth.

The outlook states that despite strong August arrivals, September fell short, and similar patterns are anticipated for the remainder of the year.

From 2026 onwards, modest annual growth of around three percent is expected, reflecting a maturing tourism sector that will need to diversify into new markets to ensure sustainable growth.

Inflation is projected to turn negative in 2025, continuing a trend observed over the past eight months.

Average inflation is expected at –1.3 percent, with year-end inflation at –0.7 percent.

This follows the rebasing to 2019 price levels and reflects easing price pressures driven by lower food and transport costs.

Inflation is expected to return to positive territory from 2026, gradually rising to around 2.5 to 2.8 percent.

Remittance growth has been revised down from 10 percent to five percent for 2025, as year-to-date inward remittances eased to 6.3 percent.

Nevertheless, the outlook states that remittances remain a stable source of foreign exchange and household income for low- and middle-income families, supporting consumption.

With migration easing, population growth is expected to stabilise, supporting consumption and labour market recovery over the medium term.

Major infrastructure investments are expected to boost medium-term growth.

Energy Fiji Limited plans to invest significantly in renewable energy infrastructure over the next 10 years, with nearly $2 billion in capital investments expected within the next five years in response to the expected pick-up in energy demand.

A $270 million portfolio of two large-scale hotel developments in Suva (Tabua Tower) and Nadi (Koro Fiji) will support both tourism and construction, alongside other major hotel projects.

While consumption and construction indicators show renewed optimism and government spending remains supportive, the 2025 growth outlook of 3.0 percent reflects a cautiously balanced view shaped by flat tourism and lower-than-expected inward remittances with prevailing upside risks.

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