DOMESTIC economic conditions continue the robustness shown last year and most partial indicators for consumption and investment have shown positive growth, says Reserve Bank of Fiji governor Barry Whiteside.
He made the comment following RBF’s board meeting on Thursday where it agreed to keep the overnight policy rate unchanged at 0.5 per cent.
“This is reflected in the acceleration of private sector credit which expanded by 11.6 per cent on an annual basis in April from 7.8 per cent a year ago,” he said in a statement yesterday.
“In line with the expansionary 2014 National Budget, both operating and capital expenditure by government is notably higher this year.”
On the external front, Mr Whiteside said the global economy continued to recover in Fiji’s favour as major advanced economies showed signs of sustained recovery.
“While the trade deficit widened further in February, the overall balance of payments position remains comfortable as it is supported, to a large extent, by tourism and personal remittance inflows.
“Foreign reserves were around $1,698.1 million on May 29, sufficient to cover 4.6 months of retained imports of goods and non-factor services. Inflation rose slightly in April to 0.1 per cent from negative 0.2 per cent recorded in March.”
This, he said, was largely driven by price increases in the alcoholic drinks and tobacco, and certain non-food categories.
Mr Whiteside said price pressures were expected to remain generally stable with the year-end inflation forecast remaining at 3.0 per cent.
“The twin objectives of monetary policy intact and the current accommodative monetary stance remain appropriate to support the domestic economic expansion.”
Suva (Fiji Times)