GLOBAL ECONOMIC DEVELOPMENTS
As a small, open economy, Fiji has benefited and has been negatively affected by global economic developments. However, despite the uncertainties in the global economy, Fiji can capitalise on a number of positive global developments. The major trading partners of the country are performing relatively well. The prospects for Fiji’s exports and visitor arrivals are promising, and there are new opportunities for offshore employment and growth in remittances. Changing global economic power and the rise of emerging economies also provide new opportunities that could be put into effect.
Despite the COVID-19 crises, frequent occurrence of natural disasters and external shocks, the Fijian economy has been resilient. The Fijian economy recorded one of its strongest periods of economic growth in the decade leading up to the COVID-19 pandemic, with nine years of consecutive economic growth from 2010 to 2018. This has been one of the longest periods of uninterrupted economic growth since independence.
During the above-stated time, per capita income levels rose to over FJ$13,000, and the unemployment rate fell to a 20-year low of 4.5 percent. This period of sustained economic growth was underpinned by increasing productivity and investment, political stability, improved private sector confidence and the implementation of critical reforms by the FijiFirst Government.
Fiji’s economic recovery looks promising with the opening of international borders on 1 December 2021, and activity in the tourism industry has picked up much faster than expected. This has a positive flow on effects to all other sectors of the economy. To improve the tourism sector’s competitiveness, FijiFirst has reduced all major tourism-related taxes in the last few Budgets and introduced attractive tax incentives to stimulate new and re-investments in the sector. A number of policy measures have also been put in place to promote growth in other economic sectors to further economic diversification in areas like business process outsourcing (BPOs), agriculture, manufacturing and other value-adding industries.
Foreign reserves remain above satisfactory levels and are forecast to remain comfortable in the medium term. As of 5 May, 2022, foreign reserves are around $3,052.0 million, sufficient to cover 8.5 months of retained imports.