April 29, 2015. Healthy domestic demand, robust investment activity and increased levels of private lending should drive strong economic growth in Fiji during 2015 if structural reforms, including infrastructure spending and privatisation, continue to be implemented by the government, according to ANZ.
The bank forecasts 4% GDP growth for the remainder of the year and that Fiji’s economy will be supported by sustained commodities demand from neighbouring Asian countries as well as rising tourism numbers. With its heavy reliance on oil imports, the economy will also receive a boost from the sharp decline in the price of crude oil.
Australia and New Zealand visitors accounted for 48% of all arrivals into Fiji in the past five years, but the rate of growth is slowing. Chinese visitor numbers, by contrast, have seen double-digit growth in the last two years and ANZ predicts the number of tourists visiting Fiji from China will continue to increase. Visitor numbers from India have also risen sharply.
Speaking today at an event in Suva, CEO of ANZ Pacific Vishnu Mohan, said: “Fiji’s imports and exports have surged over the past decade in response to the dramatic expansion of Asia’s economies. The country has a diversified economic base which positions it well for the future. However, the continued implementation of structural reforms will be critical in order to expand productive capacity and attract inward investment.”
Domestic consumer demand in Fiji is underpinned by the highest levels of personal and commercial lending in over a decade, said ANZ Asia-Pacific Economist Daniel Wilson, as well as strong inflows of inward remittances and improved labour market conditions.
“High levels of imports point to strong economic activity, but are creating a current account deficit. However, we expect this to be offset by inward remittances and tourism inflows. Looking ahead, the Reserve Bank of Fiji may need to pre-emptively tighten monetary policy to moderate demand pressure and credit growth,” Mr Wilson said.
ANZ is one of Fiji’s oldest and largest banks, employing over 800 staff in 15 branches. Its Pacific headquarters was moved from Melbourne to Suva in 2013, where its regional operations hub was also established in 2002.