Rising energy costs pose major risk to Fiji's economy: central bank

SUVA, May 30 (Xinhua) -- Rising global energy costs remain one of the biggest risks to Fiji's economy, according to the latest May Economic Review of the Reserve Bank of Fiji (RBF), or the central bank.

The report warned that higher fuel prices are already feeding into domestic inflation and could continue driving up the cost of living for households across the country.

The central bank said tensions in the Middle East have kept global oil prices elevated in recent months, with Brent crude reaching 114.01 U.S. dollars a barrel in April before easing slightly in May.

However, the bank cautioned that despite progress in international negotiations, uncertainty over global oil supply remains high and could quickly push fuel prices upward again.

The impact is already being felt locally, the bank said. Annual inflation returned to positive territory at 1.8 percent last month following a prolonged period of deflation, driven largely by increases in fuel, food and transport costs.

The RBF also warned that recent increases in electricity tariffs and fuel prices are likely to place further pressure on inflation in the coming months.

The report highlighted weaker consumer spending power as another emerging risk. Consumption lending has declined, while retail growth expectations for 2026 have softened compared to earlier forecasts.

The Reserve Bank has maintained its policy interest rate at 0.25 percent and said it will continue monitoring inflation, foreign reserves and global developments closely to maintain economic stability. Enditem