Local econony continues to recover
THE Fijian economy continued to recover in the March quarter of 2022 despite the volatile external developments.
According to the Reserve Bank of Fiji’s Quarterly Review this recovery was bolstered by the removal of pandemic-related restrictions, the resumption of international travel and tourist activities, and growth-friendly fiscal and monetary policies.
“Nonetheless, the economic outlook is clouded by inflationary pressures emanating from rising commodity and energy costs.
“Labour market conditions continued to improve in the first quarter of 2022 according to the RBF Job Advertisements Survey, as the number of advertised vacancies increased, notably in tourism-related sectors.
“The increase in Pay As You Earn (PAYE) collections and the general uptick in formal employment across major sectors, as per the FNPF data, validate the survey results,” stated the review.
It was also stated the aggregate demand had improved, aided mostly by consumer spending as a result of rising labour demand.
“Evidently, net Value Added Tax (VAT), a consumption indicator - was higher (25.1 per cent) in the year to March, while demand for consumer durable goods, such as vehicles, picked up (9.9 per cent) in the review period.
“Despite a slight uptick from the previous quarter, overall investment activity remained relatively muted in the March quarter.”
The review stated that sectoral performances varied but were broadly positive in the first quarter.
International visitor arrivals rose to 48,906 compared with the 24,521 arrivals in the December quarter of 2021 and 4223 in the March quarter of 2021.
In terms of production, mineral water, sawn timber, and mahogany outputs were said to have bolstered by external demand, while gold production weakened because of operations being impeded by the January flood.
In March 2022, the headline inflation rate increased to 4.7 per cent, up from 3.0 per cent in December 2021 and -1.2 per cent in March 2021.
Rising domestic prices were mostly driven by global developments, such as the war-induced rise in international energy and food costs, which increased the contribution of imported inflation (3.0pp) relative to domestic inflation (1.7pp) to Fiji’s overall headline inflation in March.
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