Economic growth is estimated to have picked up from the slowdown in 2003/04, underpinned by a broad-based recovery in most sectors. According to the Ministry of Finance, GDP is estimated to have increased by 2.5 percent in 2004/05, compared with a rise of 1.6 percent in 2003/04. Agriculture, which accounts for around a quarter of GDP, is estimated by the
Ministry of Finance to have increased by 2.0 percent in 2004/05 after almost negligible growth in 2003/04.

The recovery in economic activity largely reflected improved exports of squash and root crops, with other produce, such as kava and nonu, also making small contributions. Exports of vanilla have been disappointing, partly reflecting low world prices. Activity in the fishing industry remains hampered by poor fish catches, though an easing in fish exports has been offset by increases in exports of seaweed. Construction activity is estimated to have increased by 4 percent in 2004/05, underpinned by major nonresidential building projects, as well as housing construction.

Surveys by the Reserve Bank covering motor vehicles, supermarkets and household goods, point to firm growth in consumer spending. Wholesale and retail sales are estimated to have increased by nearly 5 percent in 2004/05 after little change in the previous year. Growth in electricity consumption of nearly 6 percent in 2004/05, as well as an increase in the number of active consumers, is consistent with the recovery in economic activities.