[File Photo]

The Asian Development Bank in its latest Pacific Economic Monitor has forecast the Fijian Economy to grow by 11.7 percent this year.

This is based on recent visitor arrivals and forward booking trends.

The ADB report also says tourism-related sectors contribute 10.7 percentage points of the projected 2022 growth rate with spillovers to other sectors of the economy.

Visitor arrivals for June are almost 73% of pre–COVID-19 pandemic levels which is June 2019.

Australia tops the arrivals list standing at 97% of the June 2019 levels, Canadian tourists were at 80%, American tourists at 78%, and New Zealanders two-thirds of the pre-pandemic figures.

Tax income, which represented 85% of pre-pandemic government revenue, has also increased.

It says value-added tax collections increased by 48% in the Financial Year 2022, while employment income tax increased by seven percent as jobs are gradually being restored.

The report says as recovery builds momentum, the impact of the Russian invasion of Ukraine on commodity prices is projected to offset nominal gains in economic activity and revenue collections.

Since November 2021, overall consumer prices have increased by 5.7% in six months, the highest on record for the same period.

The price increases are dominated by food and fuel-related categories

In the first quarter of 2022, the import values of fuel products increased annually by 72%, vegetable products by 41%, and prepared food by 41%, underpinned by both high import prices and improvement in demand conditions.

It adds the second-round effects of the increase in prices are also being transmitted downstream.

High fuel prices have led to increased bus fares in Fiji, while higher inflation has necessitated increases in national minimum wages to four dollars by January 2023.

The report states the Fijian economy is projected to grow by 8.5% in 2023, and 9.9% in 2024.