Fiji Must Pay Close Attention to Australian Interest Rate Hike: Damodar

Damodar Group of Companies CEO Div Damodar says Fiji must pay close attention to Australia’s latest interest rate increase and its potential flow-on effects on the Fijian economy.

The Reserve Bank of Australia has raised its official cash rate to 4.60 per cent, increasing borrowing costs for Australian households and businesses.

Damodar said Australia remains one of Fiji’s most important economic partners, meaning the effects could be felt particularly across tourism, remittances and imports.

He said higher mortgage repayments and living costs could leave Australian households with less disposable income, potentially resulting in shorter holidays, reduced spending or some travellers postponing overseas trips.

Remittances could also come under pressure as Fijians living and working in Australia face higher household and debt costs, while increased costs in Australia could potentially flow through to the prices of goods imported into Fiji.

Damodar said Fiji should respond by continuing to diversify its tourism markets, supporting greater local production and agriculture, exploring alternative sources for imports and making remittance transfers more affordable.

He warned that failing to adapt to changing international conditions could contribute to slower growth and increased cost-of-living pressures.

Damodar said Fiji must remain proactive and continue strengthening its economic resilience against external shocks.