Fiji’s central bank maintained its current accommodative policy stance by keeping its Overnight Policy Rate (OPR) steady at 0.5 percent and said domestic demand continues to be buoyant so the economy in 2014 should surpass the pre-budget forecast of 3.0 percent growth.
The Reserve Bank of Fiji, which has maintained rates since December 2011, also said economic activity in 2013 was broadly positive and the economy should achieve the forecast 3.6 percent growth.
In October the central bank revised upwards its 2013 growth forecast to 3.6 percent and its 2014 growth forecast to 3.0 percent.
Domestic demand in Fiji is being supported by improving labour market conditions, an expansionary government budget, record low commercial bank lending rates and a favorable business environment.
Barry Whiteside, governor of the central bank, said in a statement that partial indicators for investment showed that the pace of investment strengthened last year and will remain above 25 percent of Gross Domestic Product this year, adding that this was reflected in rising domestic credit growth, which had accelerated to 14.3 percent in December.
The central bank’s policy objectives also remained intact, Whiteside said, with Fiji’s foreign reserves at US$ 1.77 billion as of Jan. 29, enough for 4.7 months of imports, and inflation is expected to trend toward 3.0 percent by year-end.
In November Fiji’s inflation rate rose marginally to 3.4 percent from 3.3 percent in October, mainly due to higher prices of food and non-alcoholic beverages.