Fiji’s government is set to implement a national budget of $4.8 billion for 2025-2026, leading to a projected budget deficit of $886 million, equivalent to 6.0 percent of GDP. During a parliamentary presentation, Deputy Prime Minister and Minister for Finance Professor Biman Prasad described this deficit as a “deliberate” and “bold” decision aimed at enhancing economic resilience and alleviating the cost of living for Fijians amid global economic uncertainties.
As part of this budget, the government anticipates total revenues of approximately $3.9 billion while public debt will rise to $11.7 billion, which remains under 80 percent of GDP—a notable decrease from over 90 percent when the current coalition took office. A key aspect of the new budget includes reducing Value Added Tax (VAT) from 15 percent to 12.5 percent starting in August, providing around $250 million in tax relief. Additionally, VAT on 22 essential items will continue to be zero-rated, which along with other measures is expected to result in $500 million in overall relief for households.
In his address, Professor Prasad emphasized that this budget represents the government’s proactive response to extraordinary challenges, prioritizing the welfare of citizens while ensuring long-term economic stability. Civil servants will receive a further 3 percent salary increase, and all social welfare recipients and government pensioners will see a 5 percent boost in their allowances.
This fiscal strategy mirrors previous initiatives where increased government spending is viewed as a necessary step to counteract global economic pressures. The approach includes significant allocations for social welfare and infrastructure development, aimed at bolstering the economy and supporting vulnerable populations.
As the Fijian government navigates these substantial financial decisions, it maintains hope that investments in infrastructure and support measures will not only provide immediate relief but also foster long-term growth and resilience in the face of global economic fluctuations.
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