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Expect higher prices

Monika Singh
Saturday, January 27, 2018

YAQONA lovers should expect to fork out more for their favourite beverage as the price of commodity is forecast to remain high in the coming months.

A forecast by the Reserve Bank of Fiji said higher yaqona and tobacco prices persisted throughout last year and were likely to continue in the months ahead.

In a statement issued on Thursday, RBF governor and chairperson of the RBF board, Ariff Ali said while the inflation in the near term was expected to be domestically driven, any sharp increase in oil and food prices as well as adverse weather could put upward pressure on prices.

He said inflation was 2.8 per cent at end-2017, slightly higher than the forecast of 2.5 per cent.

Mr Ali said as of January 25, foreign reserves stood at $2,194.2 million (sufficient to cover 5.0 months of retained imports of goods and non-factor services) and were expected to remain comfortable throughout the year despite the risks from higher mineral fuel prices.

He said the RBF would continue to monitor international and domestic developments closely and align monetary policy accordingly.

Meanwhile the central bank board agreed to maintain the overnight policy rate at 0.5 per cent.

"Recent data confirm the strong growth momentum in 2017 for both the global and domestic economy.

"Externally, the International Monetary Fund earlier this month upgraded global growth to 3.7 per cent for last year on account of stronger performances in both advanced and emerging market economies.

"The Fiji economy is expected to achieve a broad-based growth of 3.6 per cent this year underpinned by higher aggregate demand coupled with strong sectoral performances in tourism and anticipated higher manufacturing and industrial activity," he said.

Mr Ali said several underperforming sectors such as gold and timber were also expected to rebound this year.

"The Government's expansionary policies should continue to support consumer and investor confidence."

Mr Ali said strong private sector credit growth predicated on the current low interest rate environment was also conducive to growth however he also noted that adverse weather and the somewhat subdued performance in the primary industries represented downside risks to the domestic economic outlook while the recent increase in global crude oil prices had trickled into higher domestic energy costs.

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