File photo

Annual inflation in Fiji fell sharply to -0.6 percent in June this year, down from 0.1 percent in May and 6.7 percent in June last year.

This drop, according to the Reserve Bank of Fiji is due to lower prices in key areas such as food, beverages, transport, housing and utilities, offering relief to consumers.

At the July 31 meeting, the Reserve Bank of Fiji (RBF) Board, chaired by RBF Governor Ariff Ali, kept the Overnight Policy Rate steady at 0.25 percent.

The bank’s current approach aims to support growth while maintaining price stability amid global uncertainties.

Ali noted that new tax measures from the 2025–2026 National Budget are expected to further reduce consumer prices starting this month.

Despite these improvements, Ali cautioned that rising tensions in the Middle East could disrupt global supply chains and shipping, creating risks for Fiji’s inflation.
Fiji’s foreign reserves stand at around $3.8 billion, enough to cover six months of imports and provide protection against external shocks.

Locally, signs point to cautious progress.

Cane crushing output is higher than last year but remains below historical levels. Production in sectors such as mahogany, timber, and mineral water has increased in the first half of this year.

Tourism grew slightly by 0.1 percent in June, helped by more visitors from New Zealand and the United States, despite fewer arrivals from Australia.

Consumer spending continues steadily, backed by rising incomes and steady remittances. Increased VAT collections, new loans, and vehicle registrations reflect ongoing demand.

Still, investment and construction are slow to recover due to high costs and regulatory hurdles.

Labour market pressures ease as fewer residents leave, foreign labour arrivals slow and recruitment plans drop.
Ali highlighted the banking sector’s role in supporting growth, pointing to $2.2 billion in liquidity and low interest rates that encourage borrowing.

He reaffirmed the bank’s commitment to monitor economic developments closely and adjust policies as necessary to protect Fiji’s stability and growth.

Stream the best of Fiji on VITI+. Anytime. Anywhere.