Aerial shot of Suva Harbour.

Fiji’s Gross Domestic Product growth forecast for this year is now around 7.8 percent compared to the 7.2 percent forecast earlier.

In his quarterly economic update ‘Westpac Wave’, Senior Economist, Krishal Prasad says this will be led by an upward revision in growth for net taxes, accommodation & food services, transport & storage, wholesale & retail sales, manufacturing, finance & insurance, construction, and real estate sectors.

Prasad says domestically, growth in the Fijian economy rebounded strongly last year as the recovery from pandemic-related restrictions mostly ran its course.

He adds the swift recovery in the tourism industry and flow-on effects in all related sectors combined with improvement in the labour market have led to higher disposable incomes and supported consumer spending in the first half of 2023.

Additionally, Prasad says the 2023-24 National Budget on balance adds positively to the general economic outlook through higher spending in key priority sectors, which will further enhance growth momentum.

He says with a more conducive business environment, moderating inflationary pressures and pickup in investments, the economy is projected to grow by a further 4.3 percent in 2024.

Prasad states the economy is expected to cool appreciably in 2025, with output growth of three percent.

The senior economist says recovery in the domestic economy has led to a positive general outlook for the financial system, with the restoration of profit and capital levels, alongside the transition to normalcy over the past year.

He states system liquidity is ample due to high levels of foreign reserves leading to historic low interest rates.

Overall, Prasad says while there are some downside risks to the outlook posed by weakening trading partner economies, increased probability of recession, rise in outward migration, and potential natural disasters, the Fijian economy is generally on track.