FIJI'S domestic economy grew by an estimated two per cent last year, driven by primary industries and service oriented sector, the Reserve Bank of Fiji said.
But restrained industrial production -— like the low annual gold output, weak electricity demand that was prompted in part by the increase in electricity tariff, and subdued construction activity had a negative impact on the overall growth, the bank.
The unwinding of previously large government operational spending provided less of an impetus towards growth, the bank's 2011 annual report said.
Released last week, the report noted some restraint in consumer and business confidence last year, although measures of consumer and business confidence remained generally positive.
Overall demand last year was propelled by a moderate pick-up in consumption activity, the bank said.
"New lending for consumption purposes rose strongly in 2011, relative to the moderate growth in imports of consumption goods in the cumulative to June period," the bank said.
Imports of investment goods rose annually by 12.1 per cent and new lending for investment purposes rose by 65.5 per cent in 2011, suggesting some semblance of positivism in firms' willingness to increase investment, the bank said.
However, businesses focused spending on maintenance rather than expanding productive capacity, the report said.
Work within the construction sector declined by 0.9 per cent last year on the back of lower private sector activity, the report said.