The Asian Development Bank’s recent Pacific Economic Monitor highlights concerns about Fiji’s limited fiscal capacity to handle potential future challenges. To sustain robust economic growth and improve resilience, the ADB advises the government to focus on enhancing the efficiency of expenditures, improving budget execution, and advancing significant private investment projects.
Key recommendations include simplifying immigration and business application processes, which are essential for stimulating new economic activities and allowing the private sector to increase hotel capacity. While the current focus on fiscal consolidation is important to address rising public debt, it is also crucial to bolster fiscal buffers and maintain macroeconomic stability, given Fiji’s vulnerability to economic shocks.
The ADB emphasizes the importance of promoting growth-oriented spending and building implementation capacity to support resilient and inclusive growth, all while working to decrease debt levels. Given the significant role of state-owned enterprises in Fiji’s economy, it suggests that implementing broader regulatory and governance standards, enhancing the capabilities of these enterprises, and creating a framework to limit guarantees can provide more fiscal space for productive investments.