Fiji’s economy is forecast to grow by 8.3 percent in 2023 and then moderate to 3.7 percent in 2024, says the Asian Development Outlook (ADO) September 2023, an update to ADB’s flagship economic publication.
The outlook for the Pacific subregion is also revised up from the projections in April. The subregion is projected to grow by 3.5 percent in 2023 and 2.9 percent in 2024.
“While it is good news that growth forecasts for Fiji are higher than expected, measures need to be taken to sustain tourism performance,” said ADB Chief Economist Albert Park. “Price competitiveness against similar destinations and household disposable incomes in key markets will be important factors in supporting tourism moving forward.”
In April, ADO projected a 6.3 percent economic growth for Fiji in 2023 and 3.0 percent expansion in 2024.
Tourism will continue as the main driver of growth for Fiji in 2023 and 2024. The ADB report says visitor arrivals to the subregion’s second-largest economy in the year to date exceeded the same period in 2019. Rebound in tourism is expected to be sustained, despite monetary policy tightening in Fiji’s major tourism source markets. The report says the Government of Fiji has allocated higher spending, with substantial increases in key infrastructure allocations in road transport and hospitals.
ADB notes that the economic performance of other sectors have been mixed. Construction improved despite high building materials costs, but gold production declined due to low-quality ore, and timber output was affected by supply issues, including bad weather and limited accessibility to forests. On the upside, exports of non-sugar agriculture increased in the first 5 months of 2023 and there was a notable increase in the exports of taro and spices.
The inflation forecasts are revised down for 2023 and 2024 on lower-than-expected consumer prices, especially since April. The new value added tax and import duties rates will keep inflation at 3.0 percent for 2023 and 2024.