Fiji’s public debt currently stands at $11.7 billion, which is approximately 79.8% of the country’s GDP. Despite this high debt level, Finance Minister Prof. Biman Prasad has excluded austerity measures in the government’s fiscal strategy. He believes that continued spending is crucial for safeguarding the economy and promoting long-term growth, especially in the face of rising global uncertainties.
During a press conference following the release of the 2025-2026 National Budget—a budget that anticipates a significant deficit of $886 million—Prof. Prasad expressed confidence in the country’s fiscal direction. He indicated that the current debt-to-GDP ratio, which has improved from over 90% two years ago, demonstrates the government’s commitment to managing fiscal sustainability.
The budget increases the deficit from 3.5% to 6%, which Prof. Prasad characterized as a “deliberate” approach aimed at both supporting citizens and investing in critical national infrastructure. He highlighted substantial allocations for public services and infrastructure projects—including flood mitigation, road improvements, and health facility repairs—projected to total around $5.8 billion.
In contrast to concerns about rising deficits, Prof. Prasad pointed out that the inflation rate is projected to decline significantly, indicating positive economic signs. The inflation forecast for 2024 is just 1.4%, down from 5.1% in 2023. Additionally, he noted that increased revenue collection has surpassed forecasts due to reforms, allowing the government more fiscal flexibility.
Although the government has revised its growth forecast for 2025 slightly downward from 3.4% to 3.2%, Prof. Prasad remains optimistic about achieving greater growth barring any drastic international conditions. He defended ongoing support measures for vulnerable populations, such as increased funding for civil servants and elderly care.
Critics have suggested that maintaining a more conservative budget might better control debt levels; however, the current strategy emphasizes resilience and long-term economic health rather than short-term cuts. Prof. Prasad believes that enhancing revenue through economic growth and job creation will be the primary pathway to further decreasing the debt-to-GDP ratio.
Overall, the government’s approach underscores a commitment to facing both immediate and future economic challenges while laying a foundation for a sustainable economic future, as it strives to ensure the welfare of Fiji’s citizens amid global pressures.
This optimistic stance reflects a careful balancing act, as Fiji navigates complex economic landscapes while remaining focused on improving the quality of life for its people and ensuring robust economic growth in the years to come.
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