Monetary Policy - Inflation To Remain Elevated - JUNE 2017
BMI View: The wearing off of favourable base effects from oil and food prices are likely to see inflation remain fairly elevated in 2017, and we maintain our average 2017 inflation forecast at 4.7%. Strong tourist inflows and the ongoing reconstruction following the damage inflicted by Cyclones Winston and Zena in 2016 will present further upside pressure.
Fiji's headline inflation figures remain elevated amid higher food and fuel prices, and we maintain our average 2017 inflation forecast at 4.7% (versus 3.9% in 2016). Strong tourist inflows as a result of the government's tourism campaigns are likely to present upside pressures, with tourist inflows leading to a higher demand for food and other products. In addition, ongoing reconstruction efforts in the wake of Cyclones Winston and Zena in 2016 will place further upside pressure on inflation, with reconstruction likely to lead to an increase in capital goods, raising the cost of imported inflation.
CPI To Remain High