The Coalition Government exceeded expectations in its fiscal performance for the 2023-2024 financial year, as indicated by a provisional final report.
The report highlights a lower-than-anticipated budget deficit and a reduction in debt compared to previous years. The government reported a deficit of $443.6 million, or 3.4% of GDP, an improvement from the originally projected 4.8%. This figure also reflects a significant decrease from the previous year’s 7.1% and the 12.1% recorded in 2021-2022, signaling effective spending management.
Total revenue reached $3,645.9 million, equating to 27.7% of GDP, which surpassed expectations due to stronger tax and non-tax collection performance. The revenue marked a substantial year-on-year increase of 32.6%. Tax revenue amounted to $3,096.8 million, exceeding forecasts by $60.9 million, or 2.0%. This increase was primarily driven by economic recovery in tourism and other sectors, with tax collections rising by 35.5%, particularly in areas like VAT, corporate tax, and departure tax. Non-tax revenue also exceeded expectations, totaling $549.2 million and comprising income from dividends, grants, and asset sales.
Shiri Gounder, Permanent Secretary of the Ministry of Finance, emphasized that enhancing fiscal and debt sustainability is a top priority for the government. He noted that fiscal consolidation has been reinforced through effective revenue reforms and expenditure policies, alongside a robust economic recovery. Fiji’s economy continues to perform well, particularly in vital sectors like tourism, aided by rising business confidence following the announcement of the 2024-2025 National Budget.
Gounder reported that government debt at the end of July 2024 was $10,309.2 million, representing 78.3% of GDP, a decrease from 82.0% in 2022-2023 and 90.6% in 2021-2022. The debt composition consists of 63.9% domestic debt and 36.1% external debt.
Despite these positive developments, Gounder expressed caution regarding potential risks. He indicated that while growth is expected to gain momentum from key tourism projects and government initiatives in the budget, challenges such as global developments, a shortage of skilled labor, weather-related events, and capacity constraints in certain sectors could negatively impact the economic outlook.