Pandemic creates socio-economic trauma: RBF
July 30, 2021 4:30 pm
The Reserve Bank in its latest economic review says the second wave of the pandemic has created additional socio-economic trauma for Fiji.
Governor, Ariff Ali says economic activity slowed significantly in the second quarter, although some pick-up has been noted recently.
Ali says this as more businesses reopened with strict COVID-19 protocols and citizens adapt to the COVID-19 environment.
He adds aggregate demand remains depressed as more people have become unemployed or have had their hours and wages reduced while business and consumer confidence has plummeted further, given the uncertainties.
Ali says while overall inflation is still low, inflationary pressures have started to creep in as rising global food and crude oil prices along with high freight costs have filtered into domestic prices.
Additionally, local border restrictions and mandatory COVID-19 protocols have resulted in higher prices for some food items and raised the cost of doing business.
The Governor says headline inflation edged up from -1.6 percent in May to zero percent in June as the higher prices of food, transport, housing, and fuel perfectly offset the decline in prices of alcohol, tobacco, yaqona, and other items.
He adds in the first half of this year, inflation had averaged -0.9 percent compared to -2.4 percent in the same period last year.
Therefore, the year-end inflation forecast of 1.5 percent is now upward biased.