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Inward remittances hit $1.3b in 2023

Inward remittances increased to $1.3 billion last year which was a new high and doubled the inflow of 2019.

In its January Economic Review, the Reserve Bank of Fiji said the opposite was reflected in investment.

While investment related lending by commercial banks noted broad growth of 33.6 per cent, the increase also reflects higher prices of construction materials, as seen in the growth of the building material price index by 7.6 per cent in 2023.

Also, RBF highlighted that the economy’s financial conditions were supportive of the country’s economic activity – where liquidity stood at $2 billion, last month.

The weighted average outstanding lending rate reached another all-time low of 4.77 per cent in December, causing the effect of activity in the economy, supported lending to the private sector and upheld the expansion in domestic credit and broad money.

“The improved activity and incomes also continue to increase the serviceability of loans, leading to a decline in commercial banks’ non-performing loans in December.”

The Central Bank highlighted that the annual headline inflation noted a 10-year-end peak of 5.1 per cent in 2023, driven by higher prices for most categories.

The elevated inflation rate reflects higher import commodity prices as well as the increase in VAT and tariff rates from the current budget.

Foreign Reserves, the RBF said, is at a comfortable $3.3 billion, sufficient to cover 5.3 months of retained imports of goods and services.

On the flip side, risks to the domestic outlook are tilted to the downside-the loss of skilled workers could negatively impact productivity, while constraints in hotel capacity and high prices could weigh on the growth of tourism for this year.

Ilaitia Ravuwai
Ilaitia Ravuwai
Journalist | news@fijilive.com

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