By RACHNA LAL
The Reserve Bank of Fiji has noted positive investment activities mainly support by positive performance in the construction sector.
This was highlighted in the central bank’s Economic Review for December.
It stated partial indicators such as new lending for investment purposes rose significantly (87.8 per cent) in the year to November.
“Imports of investment goods rose annually by 25.2 per cent cumulative to September,” it said.
“Domestic cement sales, an indicator of construction activity, rose by 12.7 per cent in the year to October.”
More spending in economy
The report said partial indicators for consumption continue to suggest increased household and business spending within the economy.
“In the year to November, new vehicle sales recorded an annual growth of 40.4 per cent, while new lending for consumption purposes more than doubled in the same period,” it said.
“In the year to October, net VAT collections grew by 12.7 per cent, while imports of consumption goods registered an annual growth of 5.6 per cent in the first nine months of the year.
“Consumption activity was further supported by the inflow of personal remittances which rose over the year to October by 6.9 per cent to $270.6 million.”
Merchandise trade
Meanwhile, the merchandise trade deficit (excluding aircraft) widened by 29.5 per cent to $1,805.1 million in the year to September when compared to the same period in 2012.
“Domestic export earnings fell by 7.7 per cent mainly led by gold, sugar, and other domestic exports,” the report said.
“This more-than-offsets the increases in fish, garments, flour and fruit & vegetables.
“Including re-exports, total export earnings (excluding aircraft) fell by 10.1 per cent.
“Import payments (excluding aircraft) rose by 8.6 per cent while retained imports (excluding aircraft), an indicator of domestic demand, surged by 18.2 per cent in the same period, supporting the growth in consumption activity.”
Liquidity and reserves
It was revealed that liquidity in the banking system rose over the month to November by 7.3 per cent ($49.8 million) to $728.4 million, led by an increase in foreign reserves ($83 million).
As of December 30, liquidity was around $635.5 million.
Foreign reserves continue to be at comfortable levels and stood at around $1,789 million as at December 30, sufficient to cover 4.9 months of retained imports of goods and non-factor services.