Fiji's economy is projected to grow by 1.3 percent this year following a slight expansion of 0.1 percent forecast in 2010.

The Reserve Bank of Fiji said visitor arrivals, gold production and consumer spending picked up towards the end of last year however lower sugar and cane output, and subdued investment activity was also evident during this period.

The RBF said the tourism industry performed exceptionally well last year and provisional estimates from the industry suggest that 2010 is the new record year for tourism, with arrivals exceeding 600 thousand.

The bank said following the recommencement of mining activity at the Vatukoula Gold Mines Limited in May 2008, gold production has also continued to expand, registering a yearly increase of 77.2 percent last year.

It said the outlook for the gold mining industry looks favourable as high world prices for the commodity and the increased productive capacity of the mine continue to assist local production.

The RBF said last year, the cane and sugar industry was adversely affected by frequent mill breakdowns which restrained the harvesting and delivery of cane to the mills, and a relatively shorter crushing season.

Both cane and sugar production declined in 2010 by 20.9 percent and 21.5 percent on an annual basis.

The inflation rate in December was noted at 5 percent, up from the 4 percent in November.

Foreign reserves amounted to 1.29 billion dollars at the end of last month, equivalent to around 3.8 months of imports of goods and non-factor services.

 
Story by: Vijay Narayan