The 2025-2026 national budget for Fiji, described as a “budget for the people” by Westpac Senior Economist Shamal Chand, aims to stimulate economic growth through increased operational expenditure. However, Chand raises concerns over the lack of significant capital expenditure, which may affect long-term growth potential. He points to potential inflation-busting measures like tax and duty cuts but warns that global fuel price rises and ongoing supply chain disruptions—stemming from conflicts in the Middle East, Ukraine, and trade tensions led by the U.S.—could diminish these benefits.
Chand acknowledges the importance of cost-of-living measures to support vulnerable Fijians in a high-inflation environment but suggests that targeted expenditure assistance might be more effective than simply reducing the VAT rate. While lowering VAT is seen as a move toward trade liberalization, he cautions that frequent changes in VAT rates could generate inefficiencies and increase monitoring costs, which may ultimately burden households through higher income taxes needed to counterbalance these cuts.
Significantly, this budget reflects a commitment to address immediate financial pressures on families, evidenced by planned investments in health and infrastructure along with potential support for first-time homebuyers. The government’s approach, which has been backed by various stakeholders, aims to provide both short-term relief and a foundation for longer-term growth strategies.
Overall, while the challenges ahead remain stark, the government’s focus on critical sectors seeks to uplift citizens and enhance their quality of life. This proactive strategy indicates optimism for the future, as leaders navigate complex economic conditions while fostering resilience and solidarity among the community.
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