By RACHNA LAL
The Reserve Bank of Fiji in its first 2013 Quarterly Review has highlighted that construction activity strengthened further in the first quarter of this year.
The report said domestic cement sales, a partial indicator for domestic construction activity, rose by an annual 50.3 per cent.
New loans to the building and construction sector rose significantly (by $14.3 million) to $18.4 million cumulative to February this year.
Looking ahead
The central bank said construction activity is expected to gain momentum once the planned construction projects eventuate this year.
“Additionally, the on-going reconstruction and rehabilitation works post Cyclone Evan is expected to positively contribute to the construction sector in 2013,” it said.
“Consistent to the increased domestic cement sales, cement production also gained momentum in the first two months of the year, as it increased annually by 29.2 per cent.
Economic growth
The Reserve Bank of Fiji maintains its forecast for the economic growth to be around 2.7 per cent this year after an estimated expansion of 2.5 per cent last year.
“Growth in 2013 is expected to be driven by all sectors except health and public administrative and defence,” the report noted.
“Notably, downside risks to this year’s growth forecast have intensified following the effects of Cyclone Evan in December last year.
“Preliminary analysis suggests significant losses in the agriculture (cane and non-cane crops), hotel and restaurants and manufacturing sectors.
“In addition, likely delays in the implementation of major capital projects (both private and public) because of reprioritisation and rehabilitation work may exert further drag on the growth forecast this year.”
Tourism sector
Looking at the tourism industry, the report said latest data from the Fiji Bureau of Statistics showed that visitor arrivals fell by 2.1 per cent/
However, arrivals were still higher than 2010 and 2009 (where an annual contraction in visitor arrivals was registered), by 4.5 per cent and 21.8 per cent respectively.
The weak outcome was largely attributed to adverse weather conditions in first quarter of last year, a devastating cyclone in December and subdued performance noted in key tourism source markets.
“However, visitor arrivals are expected to increase as we move into the tourism peak-season,” the report said.
“Australia remains the main tourist source market for Fiji, accounting for 51.1 per cent of total arrivals followed by New Zealand contributing 16.1 per cent.
“Sentiments from various industry stakeholders suggested greater resilience in the tourism industry with faster recovery from losses caused by Cyclone Evan relative to other industries.
Impetus for tourism
The Reserve Bank is hopeful the recent acquisition of brand new aircrafts by Air Pacific to modernise its fleet is expected to provide further impetus to tourism activity.
“These positive developments, together with Government assistance through various tax and non-tax measures, should create a platform for sustainable tourism development in Fiji,” the report said.