Westpac has revised Fiji’s economic growth forecast for 2025, reducing it from an earlier estimate of 3.4 per cent to 2.7 per cent. The downgrade was announced in late April 2025 as part of the bank’s latest economic outlook for the Pacific region. The revision reflects the impact of a marked slowdown in tourism arrivals from key markets such as Australia and New Zealand, alongside mounting global economic uncertainty.
According to the bank’s analysis, Australian visitor numbers in March 2025 fell by 17.4 per cent year-on-year, while arrivals from New Zealand dropped by 16.3%. These figures have raised concerns for Fiji’s tourism-dependent economy. Analysts attribute the slump to softer consumer sentiment in Australia due to its ongoing federal election cycle and a lingering recession in New Zealand, which has curtailed outbound travel from both countries.
Despite these headwinds, there are signs of resilience in Fiji’s broader economy. Inflation eased to 1.5 per cent in March, driven by falling global fuel prices, and the Fijian dollar remains stable under its pegged regime. More notably, the government posted a fiscal surplus in the first quarter of FY2024–25—the first such surplus since 2019—thanks to stronger-than-expected tax revenue and improved compliance measures.
Tourism, which contributes nearly 40 per cent of Fiji’s GDP directly and indirectly, remains the country’s economic engine. However, the sector’s volatility underscores the importance of diversification and adaptive policy settings. The Westpac report notes that stakeholders in government and industry will need to monitor economic indicators closely and prepare for a potentially slower recovery than initially projected.
The revised forecast does not suggest a downturn but signals the need for cautious optimism. While the fundamentals remain stable, Fiji’s growth trajectory in 2025 may be shaped as much by external shocks as by internal policy responses.
With the recently concluded Fiji Tourism Exchange 2025 and other trade-focused events scheduled for the middle of the year, there is hope that improved marketing efforts and new source markets can help stabilise the tourism industry in the latter half of the year. Nonetheless, Westpac’s downgrade serves as a timely reminder of the fragile balance that underpins small island economies navigating an increasingly complex global environment.
