Fiji’s Coalition Government has unveiled an ambitious and expansionary National Budget for 2025-2026, drawing attention to a plan that seeks to drive economic resilience and provide relief to households through significant investments in infrastructure, agriculture, and healthcare. The budget amounts to $4.8 billion, supported by an anticipated revenue of $3.9 billion, which results in a projected net deficit of $886 million or 6% of GDP.
This strategic approach is built upon various reforms enacted since 2023, which include civil service pay increases, the restoration of pensions for retirees, heightened cane prices for farmers, debt relief for 53,000 tertiary students, and the reinforcement of civil liberties and media freedom. Deputy Prime Minister Professor Biman Prasad emphasized that while the government did not create the public debt inherited in 2022, it has successfully managed and reduced it responsibly to below 80% of GDP from over 90%.
The budget reflects a deliberate and measured response to global economic uncertainties, with Professor Prasad asserting that Fijians are being shielded from potential external shocks. The economy demonstrated robust growth of 7.5% in 2023 and is forecasted to maintain a positive trajectory with an expected growth of 3.2% in 2025.
Key features of the budget include a substantial reduction in Value Added Tax (VAT) from 15% to 12.5% effective August 1, 2025, aimed to deliver approximately $250 million in tax relief to bolster household finances. Additionally, the government will continue the zero-rating of VAT on 22 essential goods, contributing further to easing living costs.
Investment strategies are set to encompass 177 ongoing development projects valued at $5.8 billion, including key initiatives such as the Google submarine cable project and expansions in the tourism sector. There are currently 16 projects operational and 73 under construction, signaling a healthy pipeline of investments that can foster economic stability.
Prasad highlighted the importance of policy stability, tax certainty, and streamlined approval processes as vital components to support economic activity moving forward. Fiji’s foreign reserves stand at $3.7 billion, reflecting a solid financial foundation, which is complemented by a significant reduction in inflation from 5.1% in 2023 to just 0.1% as of May 2025.
Despite acknowledging the potential impacts of global instability, especially concerning the Middle East and US trade policies, the Minister expressed confidence in Fiji’s capacity to navigate these challenges. The government’s proactive budget planning aims to ensure economic resilience and enhance the well-being of its citizens.
This new budget not only reflects a commitment to long-term growth but also embodies a hopeful perspective for Fiji’s economy, as it aims to uplift citizens amidst shifting global dynamics. By prioritizing critical sectors and adapting to external pressures, the government seems well-positioned to foster stability and prosperity for all Fijians.
Leave a comment