The island nation of Fiji, known for its high dependency on tourism and imports, is particularly susceptible to global economic shifts and climate change due to its remote location and small open economy.
The country’s Deputy Prime Minister and Finance Minister, Professor Biman Prasad, revealed that Fiji’s government revenues plummeted by nearly 50% due to significant economic decline of 17% in 2020 and 4.9% in 2021, triggered by the COVID-19 pandemic.
Responding to these financial challenges, the Fijian Government was compelled to secure substantial loans to continue its operations and provide aid to locals impacted by the pandemic, resulting in a net deficit exceeding $1 billion over the last two years.
To recover from this dire financial situation, the Coalition Government is now undertaking a medium-term strategy aimed at reducing fiscal deficits, restoring fiscal buffers, and decreasing debt-to-GDP ratio to fortify long-term debt sustainability starting from the fiscal year 2023-2024.
Amid the spike in public debt and unprecedented fiscal gaps incurred during the pandemic, Professor Prasad emphasized the need for a comprehensive fiscal risk analysis to evaluate Fiji’s resilience against potential economic shocks in the future.
Meanwhile, the upcoming 2024-2025 National Budget is set to be deliberated by the Parliament in the following week.