Pic: Digitally enhanced bird’s eye view of Suva city.
Tourism, construction and remittances are supporting Fiji’s economy, but rising fuel and freight costs are squeezing businesses and weighing on the outlook for 2027.
The Reserve Bank of Fiji kept its policy rate at 0.25 per cent in October, while Westpac lowered its 2027 growth forecast to 2.5 per cent. The World Bank’s first Fiji Economic Update points to a longer-term challenge: lifting productivity and attracting enough private investment to broaden the economy.
Westpac kept its 2026 growth forecast at 2 per cent. Visitor arrivals rose 3.7 per cent in the nine months to September, and remittances reached FJ$1.2 billion through August, up 32.7 per cent from a year earlier. Construction activity and investment lending also held up. Those gains helped sustain demand, although higher costs absorbed some of the benefit for businesses.
Westpac Pacific economist Shamal Chand said Fiji’s reliance on imported petroleum meant higher fuel, freight and insurance costs were feeding into electricity, transport, construction and food distribution. Annual inflation reached 6.8 per cent in September. Westpac’s October outlook projected it would approach 8 per cent in November before easing to 7.4 per cent by year-end. The bank also flagged El Niño as a risk to farm output, water supplies and hydroelectric generation.
Reserve Bank Governor Ariff Ali said the 29 October rate decision was intended to support economic activity and preserve adequate foreign reserves while managing inflation driven mainly by import costs. Westpac put reserves at about FJ$4.1 billion at the end of September, equivalent to 5.7 months of retained imports.
Investment and productivity will shape longer-term growth
The World Bank forecasts growth of 2.1 per cent in 2026, rising to 3 per cent by 2028. It estimates Fiji needs sustained annual growth of 4 to 6 per cent to reach high-income status by 2050, compared with a historical pace of 2 to 3 per cent. It sees scope for agriculture, fisheries and renewable energy to contribute more, alongside better training and higher workforce participation, particularly among women.
Public debt fell from about 95 per cent of GDP in 2021 to 76.9 per cent in 2025, but the World Bank expects it to rise again. That leaves the government with less room to absorb another shock while funding infrastructure and skills. For Australian firms trading with Fiji, steady tourism and construction activity support demand, while freight, energy and insurance costs remain important when pricing contracts and planning deliveries.
