Improved labour market conditions
3 October, 2023, 6:30 pm
The Reserve Bank of Fiji recorded improvements in labour market conditions with wages paid surpassing 2019 levels – possibly because of wage bargaining amid labour migration.
According to the RBF the strong growth in Job advertisements in the year to August suggests strong demand for labour.
In its September Economic Review released last week the RBF stated that financial conditions remained supportive of economic activity which was evident by the 5.5 per cent growth in private-sector credit and new lending in August.
“Cumulative to August, new lending increased for both commercial banks’ (YoY: +5.4 per cent) and licensed credit institutions’ (YoY: +54.0 per cent), and this was primarily to the household sector,” it said.
Meanwhile the inflation outlook for year-end is now around 6.0 per cent from the 2.8 per cent expected before the national budget.
The RBF said this upward revision stemmed from higher duties and taxes announced in the national budget and the recent rebound in global crude oil prices.
In terms of macroeconomic risks and outlook, the RBF says downside risks to the global economy include elevated core inflation, growing costs of international travel, rising commodity prices, export restrictions, geopolitical tensions, and high-interest rates.
It also noted that the El Nino phenomenon was a risk that may exacerbate some of these factors further, thus impacting Fiji’s export performance, raising import bills, and lowering tourism revenue.