Trade deficit narrows
FIJI’S trade deficit (excluding aircraft) narrowed by 4.9 per cent in the year to June 2021 to $1,089.9 million when compared with the corresponding period in 2020.
This was according to the Reserve Bank of Fiji’s economic review for the month of September.
The bank stated this was largely because of a growth in exports, particularly domestic exports, while imports declined.
“The growth in domestic exports was largely driven by increases in mineral water, other food and live animals, other crude materials and woodchips,” it stated.
“Inward remittances (including mobile money transfers) rose by 18.7 per cent to total $529.3m in the year to August, compared to an 8.4 per cent growth ($445.8m) in the corresponding period in 2020.
“Larger inflows from personal transfers underpin the annual increase in inward remittances.
“Notably, funds transferred through the mobile money platform totalled $102.7m in the first eight months of this year.”
RBF added the annual inflation rate turned positive in August and stood at 0.8 per cent, higher than the -0.4 per cent recorded in the previous month, led by higher food and energy prices.
Food prices was also stated to have risen by 6.9 per cent, while the upswing in global energy prices underlined the 36.5 per cent average growth in domestic fuel prices compared with the same period last year.
“Consequently, inflation is expected to pick up and settle at 2.0 per cent by year-end.
“Foreign reserves remain above adequate level and is forecast to remain comfortable in the medium term.
“Currently (30/09), foreign reserves is around $3,184.4m, sufficient to cover 11.0 months of retained imports (MORI).”
The bank reported that taking into account the satisfactory outlook for inflation and foreign reserves, and considering the risks, it had maintained its accommodative monetary policy stance in September by keeping the overnight policy rate unchanged at 0.25 per cent.