Suva, Jun 20 (IANS): Fiji's domestic inflation is expected to rise in the coming months, but the country's current economic activity has to some extent countered the harsher impacts of domestic inflation on ordinary consumers, the central bank chief said on Monday.

According to a statement by the Reserve Bank of Fiji (RBF), Governor Ariff Ali told a business conference here that the island nation's domestic inflation is expected to increase from three percent to around seven percent in the next couple of months before they can see a drop towards the end of the year, reports Xinhua news agency.

Fiji has been able to successfully manage inflation, he said, adding that the investment market is also growing, contributing to its economic recovery.

Meanwhile, Minister for Commerce, Trade, Tourism and Transport Faiyaz Koya said that Fiji's economic recovery stems from the effective health response in gradually transitioning from immediate crisis management to the implementation of recovery.

He said that Fiji has seen the strong emergence of digital trade and e-commerce being a global market playing field for businesses of all nature and sizes to survive through and thrive past the Covid-19 crisis.

"Aside from being a trading hub of the Pacific, we strive towards becoming an investment destination of choice. This is evident as the Fijian government is committed to implementing legislative, regulatory procedural reforms by streamlining processes whilst adapting to digital technology," the Minister said.

Fiji's annual headline inflation stood at 4.7 per cent in April this year due to the rising food and fuel prices, according to the RBF.

Fiji's economic growth is expected to rebound by 11.3 per cent this year, following a 15.2 per cent contraction in 2020 and a 4.1 per cent decline in 2021.