ANZ Pacific Economist Kishti Sen said disposable income is the prime determinant of consumer demand, and the biggest boost to household disposable income growth in recent years has come from private inward remittances.
"Fiji’s remittances grew by 7 per cent per annum, on average, since 2017, including a massive 11.1 per cent in 2020," he said.
"Samoa’s growth has been more impressive at 12.7 per cent per year, while Tonga was a little lower at 9.7 per cent per year, but was up a whopping 22 per cent last year.
"Total remittances to Fiji in 2020 was FJD653m (6.9 per cent of GDP), Samoa WST603m (29 per cent) and Tonga TOP425m (37 per cent) – all setting new historical records."
Mr Sen said given that 2020 was a year of Covid-19 economic uncertainty, the growth in remittance was "somewhat surprising.
"A combination of factors contributed - obviously, at the top of the list is the Pacific shared identity of 'stronger together' - sticking together when it matters most," he said.
"Ongoing employment in the essential service sectors like healthcare, construction and manufacturing of the developed world also helped, along with hefty government income support payments to households in remitting countries.
"More recently, a restart of the seasonal worker program and a stronger Australian and New Zealand dollar has contributed also, as well as the lower cost of remittances - according to the Central Bank of Samoa, the average cost of sending AUD200 in 2020 was 2.3 per cent lower than in 2019."
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