VAT collections decrease by 25.2 per cent
VAT collections stood at $41.1 million in January, a decrease by 25.2 per cent.
The Reserve Bank of Fiji also highlighted that while partial indicators in January pointed to weak consumption spending, the bank's December 2020 Retail Sales Survey indicated that consumer spending would pick up by at least 1.3 per cent this year.
The commercial banking sector recorded a 39.3 per cent decrease new lending for consumption which was underpinned by a decline in lending to the private individuals, and wholesale, retail, hotels and restaurants categories.
Decreased lending to the real estate, building and construction sectors led to a decline by 47.2 per cent in commercial banks' new investment lending.
With a 24.7 per cent drop in cement sales, the RBF also highlighted that forward-looking indicators such as the number of building permits issued and value-of-work put in place recorded annual declines cumulative to September 2020.
It said investment spending was forecast to contract further by 6.0 per cent this year to about 17.2 per cent of GDP, led by the decline in both private and government-funded projects.
Meanwhile in the review period financial indicators pointed to subdued aggregate demand and low risk appetite by banks.
The RBF stated that money supply growth decelerated to 0.8 per cent in January from the 3.0 per cent growth in the same period last year, which reflected the decline in gross reserves and subdued domestic credit activity.
In that same period private sector credit fell by 3.0 per cent, stemming from lower lending to firms and households while commercial banks' new lending fell by 14.3 per cent in January on an annual basis, but increased by 12.8 per cent from December 2020.