14 Mar 2005

Fiji Reserve Bank warns of high inflation

9:09 pm on 14 March 2005

The Reserve Bank of Fiji has warned of high inflation and low economic growth this year.

Radio Fiji reports the bank is forecasting inflation to reach 4.5 percent by the end of the year if transport costs increase as proposed.

The Land Transport Authority is considering applications to increase bus fares by 11 percent and taxi fares by 50 percent.

The Bank says if the fares are not increased, inflation rate would still hit 3.8 percent by the end of the year.

On economic growth this year, the Reserve Bank says this is expected to slow to 1.5 percent.

It attributes this to lower than expected growth in manufacturing, as well as social and personal services and the agricultural sector.

This will be sharply lower than last year's estimated growth of 3.8 percent driven largely by construction, the wholesale and retail trade, hotels, manufacturing and agriculture.