Leader of the Opposition, Inia Seruiratu has criticized the Government’s forecasted revenue of $3.7 billion for the upcoming financial year, calling it ‘far-fetched and too optimistic’. This projection marks a $1 billion increase from the 2022-2023 period.
In his response to the 2024-2025 Budget Announcement, Seruiratu highlighted that government spending for the next financial year is expected to exceed revenues by $639 million, which is equivalent to 4.5 percent of GDP.
Seruiratu pointed out that this excess spending would require additional debt repayments amounting to $349 million, pushing the gross deficit close to $1 billion, or seven percent of GDP. This, he argues, contradicts the Government’s commitments to reduce national debt.
“If the Government fails to achieve its revenue forecast, the shortfall will further increase the budget deficit, potentially resulting in a much larger deficit,” he stated.
He also noted that the deficit would likely be financed domestically, primarily through the Fiji National Provident Fund, which would contribute to inflation in the country.
“The inflationary pressures will prompt the Reserve Bank of Fiji to raise interest rates, and pressure on the balance of payments will reduce foreign reserves, risking a devaluation of the dollar,” Seruiratu warned.
“Families in Fiji are already struggling with rising prices of essential goods. Any additional increases in prices or interest rates will only exacerbate the public’s suffering,” he added.
Seruiratu accused the Minister for Finance, Professor Biman Prasad, of changing his stance on Fiji’s debt. While in Opposition, Prasad emphasized the nominal value of the debt, but now he refers to debt as a percentage of GDP.
“The public needs to be aware of the real figures. The reality is, although the debt-to-GDP ratio is decreasing, the nominal debt has reached a record high of $10.9 billion, up from $9.1 billion during the 2021-2022 period,” Seruiratu concluded.