Higher fuel prices saw the inflation rate sour to a staggering 10.5 percent in April this year with consumers having to fork out more money for goods and services.

However, the Reserve Bank of Fiji's Economic review for May showed that inflation has declined slightly to 9.4 percent last month, while on a monthly basis, consumer prices rose by 0.1 percent.

The RBF said this is due to the impact of the high crude oil prices in March and April.

But the RBF also predicted that inflation will decrease gradually from May with the year end inflation forecast at 5 percent.

The review also highlighted that the recent performances of the major sectors support the expected recovery of the domestic economy this year.

The RBF said the positive growth in the tourism sector is underpinned by the new airlines providing direct and en-route services to Fiji, as well as the prevailing competitive accommodation packages.

Gold production also rose significantly on an annual basis by 68.6 percent.

The RBF said during the same period, electricity production rose by 5.5 percent.

The Bank said consumption activities also appear to be strengthening as Net VAT collections increased by 13.7 percent.

However, new vehicle sales remain depressed with a 40.1 percent decline.

As at May 31st, foreign reserves is $1.09 billion, equivalent of 3.4 months of goods and non-factor services.