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Focus: Merchandise Trade

Services play a major role in our economy and an efficient services sector is considered to be vital for trade and economic growth and for dynamic and resilient economies. Services
23 May 2015 08:13
Focus: Merchandise Trade

Services play a major role in our economy and an efficient services sector is considered to be vital for trade and economic growth and for dynamic and resilient economies.

Services provide vital support to the economy as a whole and more specifically to industry, for example through finance, logistics and communications.

Increased trade in services and the widespread availability of services may boost economic growth by improving the performance of other industries, since services can provide key intermediate inputs, especially in an increasingly interlinked and globalized world.

Fiji’s export of services in the December quarter of 2014 was valued at $643.4 million, a decrease of $55.5 million or 7.9 per cent when compared to the previous quarter.

The value of services imported for the same period was $327.0 million, a decrease of $14.4 million or 4.2% when compared to the previous quarter.

The trade surplus for December quarter of 2014 stood at $316.4 million while September quarter of 2014 stood at $357.5 million.

Our trade surplus decreased by $41.1 million or 11.5 per cent.  It is noted from graph 1 that export of services is always at its peak in September quarter of each year.

This is because of tourism, they arrive in big numbers in the month of September and higher earnings receive from goods processed locally.

The total value of Fiji’s export of services for the year 2014 stood at $2,412.4 million and services imported was valued at $1,274.4 million.

In comparison with year 2013, the export services increased by $165.1 million or 7.3 per cent and the value of services imported also increased by $148.2 million or 13.2 per cent.

The trade in services surplus in 2014 amounted to $1,138.0 million, $16.9 million or 1.5 per cent more than the 2013 surplus of $1,121.1 million.

Looking at Graph 2, the total value of export increases each year and the total value of import increases at the same rate and does not exceed our total exports which is good for our economy.

Travel services is the key driver in the increase of the value of export of services because of the tourism sector that earned a record of $1,404.6 million in 2014.

Compared to other services recording deficits per year, transportation and telecommunication, computer and information services are the two main services that records the largest increases.

Transportation because of our volume of exports is increasing, consequently both direct and indirect costs increases as well for sea freight.

For telecommunication, computer and information services, import costs will always increase due to the need to keep up with constant upgrades in technology because technology is one of the primary tools in our lives.

Foreign Reserves remain at comfortable levels of $1,744.4 million at the end of March. Sufficient to cover 4.6 months of retained imports of goods and non-factor services.

– This is an informative publication, sponsored by The Fiji Sun, Fiji Bureau of Statistics and HFC Bank. All views expressed or implied are purely of the Treasurer at HFC Bank, Peter Fuata.

 




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