Increase in lending to the real estate sector

The RTGS system is the first of the two major components being inttoduced as part of the automated transfer system (ATS): an important payments infrastructure which constitutes that largest single investment made by RBF. Picture: FILE

New lending to the real estate sector rose in the year to August by 97.9 per cent, according to the Reserve Bank of Fiji’s September economic review.

However the RBF highlighted that in the review period lending to the building and construction sectors dropped by 27.7 per cent in the same period.

This decline was because of the base effect and a combination of higher building materials prices and supply constraints that might be weighing on construction activity.

On a positive note the RBF said labour market conditions continued to improve as economic activity moved closer to pre pandemic level.

Based on its regular job survey the RBF noted that in the year to August the number of jobs advertised rose by an annual 212.4 per cent compared with a dip of 57.1 per cent in the same period last year.

The RBF also noted a 15.7 per cent growth in Pay As You Earn tax collections indicating an improvement in formal employment.

A 5.1 per cent growth was recorded in the net domestic credit in August mainly because of an increase of 4.6 per cent in the private sector credit.

In the same period commercial banks’ new lending grew significantly by 63 per cent in the year to August led by higher lending to tourism-related sectors.

Liquidity in the banking system increased by $76.1 million over the month of August and stood at $2.3 billion at the end of last month, mainly because of an increase in foreign reserves.

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