The Fijian economy is projected to record a large contraction according to the Reserve Bank of Fiji economic review.

While the economy is anticipated to note some recovery in 2021, this is highly possible on the resumption of global travel.

On sector performances, the latest indicators highlight weakening in major industries.

The closure of international borders led to visitor arrivals contracting significantly by 43.5 percent up to April.

Subdued demand as well as lower household and business confidence can also be seen in consumption and investment indicators to date.

In step, overall labour market conditions have worsened with further announcements of layoffs.

In April, domestic credit growth slowed by 4.2 percent (from 7.9% in April 2019) on account of reduced lending to private sector business entities and private individuals.

In the same period, both the commercial banks’ new lending and deposit rates fell annually.

Excess liquidity in the banking system stood at $718.6 million in April on account of RBF’s purchases of infrastructure bonds and higher foreign reserves.

The Reserve Bank’s dual monetary policy objectives, stable inflation, and foreign reserves, remain intact.

Inflation remained in negative territory for the seventh consecutive month in April at negative 1.3 percent underpinned by lower prices of yaqona, vegetables, kerosene, and diesel.

Therefore, the Reserve Bank kept its Overnight Policy Rate unchanged at 0.25 percent in May.

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