RBF forecasts growth in key sectors

THE central bank is looking at the tourism and sugar sectors to continue to be at the forefront of the national economic activity this year, having performed exceptionally well in 2014.

It is however, mindful of the possible adverse effects the prolonged dry spell in the West will have on the sugar industry.

Reserve Bank of Fiji governor Barry Whiteside said they were forecasting this year’s growth at 4.3 per cent, which would make it the third year in a row with growth of more than 4 per cent.

And more importantly, he said, was that the country’s growth continued to be broad based with all major sectors of the economy forecasted to register increases.

Investment to gross domestic product (GDP), he said, would remain above 25 per cent for the third consecutive year with the private sector underpinning this number.

“Private sector investment (excluding Government funded projects) is estimated at 13.5 per cent of GDP this year,” he said.

Consumption activity, he said, had also been robust and was being sustained by a combination of factors, including lower personal income taxes, strong growth in personal inward remittances and new consumption lending by the banking sector.

“Forward looking indicators point to elevated activity into next year.”

He said inflation slowed in May to 0.6 per cent from 1.5 per cent in April but, any upward movements in the global oil prices in the next six months would likely have an impact on this key indicator.

Foreign reserves were recorded at just under $2billion over the past few weeks, sufficient to cover 4.7 months of retained imports of goods and services.

In Fiji dollar value terms, he said, the reserves had never been higher.