Approach clouds investment outlook
MARKET SNAPSHOT
STRI as at July 01 , 2022 = 7977.44 LOCAL SHARE PRICES
Atlantic and Pac. Pack. Telecom Holdings Fiji Ltd Bird Institute Ltd Insurance Ltd Foods Ltd Television Ltd Finance Ltd Growth Fund Ltd Global Ltd Denarau Marina Ltd Green Ind. Fiji Ltd Patel Group Fiji Ltd Comp. of Fiji Ltd Tsusho Sth Sea Holdings Investments Ltd Holdings Ltd Convertible Notes
THE Reserve Bank of Fiji says despite the improvements in the various sectors of the economy, the wait-and-see approach of investors in the lead-up to the general election, along with high construction (due to supply chain and freight issues) and rising labour costs, continue to cloud the investment outlook for 2022.
In its June economic review released yesterday, the RBF stated that the annual inflation stood at 5.0 per cent in May, fuelled by higher food and energy prices with the second
Amal. Communications Free FijiCare FMF Fiji Kontiki Kinetic Pleass Port Pac. RB Rice Toyota VB Vision Fijian BSP
round effects of these hikes were much more apparent now as, excluding food and fuel, underlying consumer prices rose by 4.7 per cent.
It noted that the war in Ukraine continued to subvert major commodity markets, supply chains and trading partner economies, causing imported inflation to surge to 10.0 per cent while domestic inflation stood at 3.4 per cent.
The review also highlighted that food inflation dipped in May because of the removal of VAT on the 21 food items but was still relatively high, with an average of 5.3 per cent in the first five months. It further stated that the year-end inflation at this juncture was still forecast to reach 5.0 per cent, with some upside risks to be considered in the upcoming review post the National Budget in July with rising imported inflation remaining a sizeable risk to the faster erosion of foreign reserves.
However it was also highlighted that foreign reserves were forecast to remain adequate in the medium term, upheld by the rebounding tourism industry, higher inward remittances and government loan drawdowns. Foreign reserves are currently around $3.4 billion, equivalent to 7.9 months of retained imports of goods and services.
-