Fiji’s ability to navigate financial and economic shocks remains a focal point for development partners, as highlighted in the latest Pacific Economic Monitor (PEM) from the Asian Development Bank (ADB). The ADB emphasizes the need for the government to focus on improving spending efficiency, enhancing budget execution, and advancing significant private investment projects to sustain robust economic growth and build resilience.
Key measures suggested include the streamlining of immigration and business application processes, which are essential for boosting new economic activities and allowing the private sector to expand hotel capacity. The PEM is a biannual review by the ADB examining economic trends and policy challenges in its 14 Pacific developing member countries, including Fiji.
While acknowledging the government’s current emphasis on fiscal consolidation to address rising public debt, the ADB stresses the importance of strengthening fiscal buffers and maintaining macroeconomic stability, given Fiji’s vulnerability to economic shocks. The report indicates that limited fiscal space to absorb future disturbances raises concerns, underscoring the necessity for continued improvements in expenditure efficiency.
The ADB calls for promoting growth-oriented expenditure and enhancing implementation capacity to foster resilient and inclusive growth while also reducing debt levels. The report also points out the significant role state-owned enterprises can play in driving productive investments.
The focus, according to the ADB, should be on ensuring fiscal sustainability and prioritizing resources to meet societal needs and support infrastructure development for sustainable growth. The government might need to enhance its implementation capacity to address issues related to under-execution of capital expenditures.
The ADB projects Pacific economies to grow by 3.3 percent in 2024 and 4.0 percent in 2025, while reiterating the ongoing necessity to build resilience in the region.