Fiji Economy Facts

by ebizdir · Published January 30, 2023 · Updated February 22, 2023

Economical overview

Fiji is the largest, most developed and least dependent economy in the South Pacific, but in a global perspective, the country is small and vulnerable. Fiji is considered by the World Bank as a middle-income country, but many residents are poor. The sugar and clothing industry has long been the engines of the economy, but both have declined since the 2000s. Nowadays, the service industry is by far the most important part of the economy.

In the service sector, almost three quarters of Fiji’s wage earners are found, accounting for an almost equal share of the country’s gross domestic product (GDP). Although political unrest has at times frightened many visitors, tourism is still one of the most important sources of income.

Countryaah.com: Major imports by Fiji, covering a full list of top products imported by the country and trade value for each product category.

Sugar is still the most important commercial crop and one of the most important export goods. But sugar sales have fallen sharply, from 40 percent of export revenues in 1994 to 14 percent in 2015. The industry is considered outdated and poorly managed. In addition, the EU has phased out previous subsidies.

The textile industry’s share of exports has also fallen sharply, especially as a result of the favorable conditions for entry to the US market were withdrawn in 2005. By the mid-2010s, bottled mineral water had passed on both sugar and clothing as the most profitable export product.

Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including FJI which represents the country of Fiji. Check findjobdescriptions to learn more about Fiji.

Growth was good in the early years of the 2000s, but the sanctions of the world after the 2006 coup hit the economy hard. In 2009, the economy shrank as political developments and the international economic crisis put severe pressure on Fiji’s finances that year. Tourism declined, as did Fiji overseas money shipments, and exports weakened. The unstable situation caused donors and foreign investors to pull their ears. A large current account deficit, which includes service trade and money transfers, threatened to cause a payment crisis.

A few days after the constitution was repealed in April 2009, security forces occupied the central bank, whose chief executive was deposed. The successor immediately allowed the currency to devalue by 20 percent. This led to a sharp increase in inflation, with a peak of 10.5 percent in April 2010. Subsequently, the rate of price increase has been steadily pushed down and averaged around 3 percent during the first half of 2010.

During the first half of 2010, Fiji’s economy grew steadily, despite several setbacks in the form of storms and floods. The main reasons for the good growth were infrastructure investments, poverty reduction, increased domestic consumption and growing foreign investment. Multiple tax cuts and rising amounts sent from Fijians abroad to their home country also contributed.

However, the most important thing to attract foreign investors was that the country gradually stabilized politically. The adoption of a new, democratic constitution in 2013 and the fact that free elections were carried out in 2014 are considered by most analysts to be decisive for economic development.

However, when the cyclone Winston hit the islands in February 2016, the financial losses became so large (equivalent to about a third of GDP) that Fiji was forced to take out a loan from the World Bank for the first time in 23 years. The money (US $ 50 million) was used to rebuild transportation systems and other infrastructure on the islands. Good revenues from growing tourism could offset a significant part of the economic losses and GDP growth was finally positive in 2016 as well.

Fiji’s foreign debt is relatively modest, although it increased in the early 2010s. Official unemployment was around 8–9 percent during the first half of the 2010s. A significant proportion of the labor force is found in the informal sector, where wages are low and conditions are uncertain. The proportion of underemployed persons is also expected to be high.

Fiji is drawn with a considerable current account deficit, ie imports are significantly larger than exports. The current account balance, which includes trade in services and money transfers, is also negative.