Inflation fell to 1.9 percent in August from a high of 6.8 percent in January.
The Reserve Bank of Fiji says it is expected to be around 2.5 percent by year-end.
The RBF says foreign reserves reached a new all-time high of $2.45b last month and are forecast to remain comfortable during the rest of the year.
Growth prospects for this year are slightly upward biased following the base effects from the lower-than-expected growth outturn last year.
The lower growth in 2016 was underpinned by weaker performances in the agriculture, forestry, real estate, accommodation and food services, transport and storage, and financial and insurance activities sectors.
To date, sectoral performances have remained mixed while aggregate demand continues to be buoyant, boosted by ongoing consumer and business optimism and the positive impact from the 2017-2018 National Budget policies.
The economy remains on track to achieve its eighth consecutive year of growth in 2017.
