RBF says labour market conditions worsen while consumption and VAT collections continue to contract
In addition, the number of jobs advertised contracted by a significant 48.8 percent on an annual basis up to May, indicating depressed recruitment intentions and business activities.
Upto May, contractions were noted in commercial banks’ new lending for consumption purposes by 20.2 percent, net VAT collections was down by 30.1 percent, as well as registrations for new vehicles were down by 45.3 percent and secondhand vehicles were down by 65.5 percent. In the same period, domestic cement sales were down by 18.8 percent and new lending for building and construction purposes were down by 28.7 percent.
Excess liquidity in the banking system remained ample at $849 million at the end of May on account of RBF’s investment in government bonds, higher foreign reserves and the reduction in currency in circulation over the month.
Annual inflation fell further to -1.7 percent in May from -1.3 percent noted in April and was significantly lower than the 2.1 percent recorded in May 2019. The outcome was largely driven by lower prices for yaqona, fruits and vegetables, kerosene, petrol and diesel.
As at today, foreign reserves totaled $2.181 billion, sufficient to cover 6.8 months of retained imports.
Credit: Fijivillage
Date: 30/6/2020
