Fiji’s government is preparing for a national budget for the fiscal year 2025-2026, which is projected to result in a significant budget deficit of $886 million, representing 6.0 percent of the country’s GDP. This deficit is nearly double that of the previous year at three percent, as revealed by Finance Minister and Deputy Prime Minister Professor Biman Prasad. He has characterized this decision as intentional, aimed at bolstering the economy amid escalating global uncertainties.
The planned government expenditure stands at $4.8 billion, while revenue is estimated at $3.9 billion. Professor Prasad noted that the increased spending was facilitated by tough revenue and tax measures implemented over the past two years, providing the necessary flexibility for the government to react to current challenges. Public debt is expected to reach $11.7 billion, which equates to 79.8 percent of GDP, a marked decrease from over 90 percent when the current administration took office in 2022.
In light of ongoing global tension and supply chain issues, the budget emphasizes protection for families facing rising living costs, continuity of essential services, and long-term economic resilience. Key measures include keeping zero VAT on 22 essential items, maintaining a $200 back-to-school support initiative, and ensuring free education and healthcare. Additionally, support for the elderly and vulnerable populations is set to increase.
Investment in critical sectors such as health, infrastructure, agriculture, education, and law enforcement remains a priority, with more than 170 investment projects worth $5.8 billion in progress. Though Fiji’s economic growth forecast has been slightly adjusted down to 3.2 percent, Professor Prasad maintains that the economic fundamentals are robust, bolstered by $3.7 billion in foreign reserves and a decline in inflation to 0.1 percent from 5.1 percent a year prior.
The Finance Minister has assured that the budget is transparent and foreseeable, with no surprises, emphasizing the government’s commitment to ensuring Fiji’s stability amidst uncertain times. This approach not only aims to address immediate challenges but also sets the groundwork for sustainable growth and prosperity for all Fijians in the future.
Overall, this budget reflects a pivotal moment for Fiji as it adapts to global economic pressures while prioritizing the well-being of its citizens—a hopeful step towards resilience and recovery.
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