Fiji’s economic outlook is showing promising signs of improvement, with the national debt-to-GDP ratio projected to decline to around 77.8 percent by July 2025, as reported by Deputy Prime Minister and Finance Minister Professor Biman Prasad. This marks a substantial decrease from a peak of 90.7 percent recorded during the 2021-2022 financial year and a reduction from 79.4 percent in the fiscal year 2023-2024.
The anticipated drop in the debt ratio is largely driven by a robust recovery in Fiji’s Gross Domestic Product (GDP), along with the government’s efforts in fiscal consolidation, which have successfully lowered fiscal deficits from approximately 7 percent to between 4 and 4.5 percent. Professor Prasad noted the positive impact of ongoing tax reforms aimed at enhancing revenue generation, coupled with a commitment to fiscal discipline that emphasizes expenditure rationalization, improved public sector efficiency, and prioritization of high-impact projects.
Moreover, Fiji’s trade deficit is set to decrease to 34 percent of GDP in 2024, down from 36.5 percent in the previous year. This improvement aligns with expected enhancements in the current account balance, projected to reach 4.7 percent of GDP, primarily fueled by revitalized tourism and remittance inflows. As of the end of January, Fiji’s foreign reserves stood at $3.7 billion, which is sufficient to cover 5.9 months of retained imports.
Professor Prasad underscored the strengthening macroeconomic fundamentals in the nation, noting significant growth across key industries, a solid banking sector, and a resurgence in domestic demand. He expressed confidence that the country is on track to achieve its growth projection of 3.4 percent for the year, with the tourism sector poised to play a vital role in this growth trajectory, benefitting various industries including transportation, accommodation, wholesale and retail, and public administration and finance.
In summary, Fiji’s financial landscape reflects a strong recovery with the government’s ongoing strategic efforts in fiscal management paving the way for a stable economic future. The combined effects of bolstered tourism and improved macroeconomic conditions not only foster optimism but also lay a foundation for sustained growth ahead.
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