New loans for real estate have declined, while construction activities are expected to increase, notes the Reserve Bank of Fiji’s latest economic review, for the month ended May.
Cement sales grew by 6.3 percent in the year to April, and expected to trend upward as post-cyclone construction activities surge.
“In contrast, new lending for investment purposes fell by an annual 22.1 percent, underpinned by declines in new loans to the real estate (-23.4 percent) and the building and construction sectors (-20.8 percent).”
The review notes the Fiji National Provident Fund’s $275 million payout and the inflow of aid and donations following TC Winston is expected to support consumption and investment activity for most of this year.
Additionally, a $70 million Government grant under the Help for Homes initiative is expected to boost reconstruction activity in the economy.
Consumption and investment indicators have reflected higher activity in recent months and while Fiji’s economy is forecasted to record its seventh consecutive year of growth in 2016, it is now projected to grow by 2.4 percent this year. This is less than the 3.5 percent earlier anticipated, due to the impacts of Tropical Cyclone Winston in February and flooding in April.
“Sectoral performances have been generally mixed, according to latest data. Visitor arrivals culminative to April rose by 6.8 percent, underpinned by higher tourists from New Zealand, Australia, China and the Pacific Islands.”
Increased arrivals are anticiapted for the tourism peak season from June to October, and from the commencement of direct flights to Singapore (from April) and San Francisco (from June).