Fiji’s economic growth forecast downgraded to 2.8%

June 12, 2024 4:33 pm

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The Reserve Bank of Fiji has downgraded Fiji’s economic growth forecast to 2.8 percent from the 3.4 percent projected in November 2023.

The RBF in its latest release says the downward revision is based on the latest available data and weaker incoming forward-looking information.

Governor Ariff Ali says the revised forecast takes into account the possible increase in Government expenditure in the 2024-25 National Budget to boost the economy.

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RBF Governor Ariff Ali [File Photo]

He says the Fijian economy started 2024 on a softer note than anticipated as evidenced by partial indicators.

Ali says the other key sectors to contribute towards this growth include the financial, agriculture, transport, accommodation, wholesale & retail sales, manufacturing, information & communication, electricity, construction, mining and administration sectors.

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Ali adds GDP projections for 2025 and 2026 are broadly unchanged from last November, with economic activity forecast to strengthen slightly and hover around the pre-pandemic growth trend of three percent.

He says risks to the outlook are tilted to the downside and include heightened geopolitical tensions, continued loss of labour due to migration, delayed regulatory approvals, rising cost of doing business and the constant threat of climate change & natural disasters.

These combined with the proposed increase in the minimum wage rate without increased productivity will raise input costs for businesses resulting in higher prices of goods and services that are likely to be passed down to consumers, affecting inflation and economic activity.