The Fiji Government has presented a budget for the 2025-2026 fiscal year, forecasted to have a significant deficit of FJ$886 million. Deputy Prime Minister and Minister for Economy Biman Prasad described this budget as a “practical and deeply measured national response” to extraordinary global challenges, including geopolitical tensions and economic volatility. The total proposed government expenditure is FJ$4.8 billion, with projected revenues of FJ$3.9 billion, partly due to a reduction of the Value Added Tax (VAT) from 15% to 12.5%.
The debt-to-GDP ratio is also a top priority for the government. The ratio is expected to reach 77.5% at the end of July 2025, translating to FJ$10.8 billion, with domestic debt comprising 64.9% of this total. The government plans to finance the deficit through a combination of domestic and concessional external borrowing, project debt for the following year to increase to 79.8%.
Critical adjustments to taxation include a newly introduced 3% export duty on gold and silver ore concentrates, aimed at encouraging domestic processing, and an increase in departure tax to FJ$200 to generate additional revenue. The plan also encompasses a boost in police personnel to confront rising drug-related issues, with the government intending to recruit 1,000 new officers and address community safety concerns via improved border protections and new facilities for drug detection.
Reflecting on a previous article, the government’s intent to bolster social services and infrastructure is evident, as allocations for civil servants and vulnerable populations will also see increases. This budget underscores a commitment to addressing immediate economic challenges while laying a foundation for longer-term stability and growth, showcasing the government’s proactive stance in protecting the well-being of its citizens amid uncertain global conditions.
Overall, while this budget reflects significant fiscal challenges, the government appears committed to navigating these tides with a focus on resilience and infrastructure investment, fostering hope for a more stable and prosperous future for Fiji.
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