Fiji’s economy on track, says RBF
4 June, 2019, 10:15 am
FIJI’S economy is said to be on track for a 10th consecutive year of growth, however, indicators such as drop in liquidity and our trade deficit show a different scenario.
In its May economic review released yesterday, the Reserve Bank of Fiji revealed that liquidity dropped to $329.7 million in May from $360.1m recorded in April this year.
However, according to the RBF, the $329.7m is sufficient to support economic activity.
The review also highlighted that in the year cumulative to February, merchandise trade deficit (excluding aircraft) narrowed by 2.9 per cent when compared with the 7.2 per cent widening a year ago.
It said total exports (excluding aircraft) grew by 13.4 per cent largely underpinned by 33.9 per cent growth in re-exports while domestic exports declined by 1.2 per cent because of lower exports of woodchip, gold, bauxite, chemicals, garments, kava, molasses and sugar.
Meanwhile, in the same period, total imports (excluding aircraft) rose by 2.9 per cent to $852.7m, led by higher imports of mineral fuel, manufactured goods, food and live animals and other commodities.
During the review period domestic credit growth slowed to 7.7 per cent from 8.0 per cent in March while growth in private sector credit (8.3 per cent) remained unchanged over the month but was slightly higher than 8.0 per cent noted in April 2018.
While commercial banks’ new lending contracted by 10.7 per cent in the same period because of declines in lending to the transport and storage, private individuals, electricity, gas and water and real estate sectors, commercial banks’ outstanding lending rates increased over the month to April while new lending rates fell.
According to the central bank annual inflation in April stood at 2.1 per cent, lower than the 4.0 per cent registered in both March 2019 and April last year and the bank highlighted that over the month, consumer prices decreased by 0.2 per cent because of lower prices of food and non-alcoholic beverages; housing, water, electricity, gas and other fuels and the transport categories.
The RBF noted mixed performances from the various sectors in the economy whereby visitor arrivals increased by 5.8 per cent cumulative to April owing to higher arrivals from New Zealand, Japan, US, Australia and Rest of Asia while in the year to April, pine log production declined by 1.1 per cent which led to a consequent decline in woodchip production. Meanwhile sawn timber production was higher and mahogany output noted a turnaround after declining in the first quarter and in the same period, electricity generation grew while gold production declined.