The Asian Development Bank’s recent Pacific Economic Monitor highlights concerns over Fiji’s limited fiscal capacity to manage potential future economic disturbances. To ensure sustained economic growth and bolster resilience, the report recommends that the government focus on enhancing the efficiency of public spending, improving budget execution, and progressing key private investment initiatives.
The report emphasizes the importance of streamlining processes related to immigration and business applications, stating that these steps are vital for stimulating new economic activities and facilitating an increase in hotel capacity by the private sector.
While the current focus on fiscal consolidation is essential for addressing rising public debt, the report underscores the need to strengthen fiscal buffers and maintain macroeconomic stability, particularly because of Fiji’s vulnerability to economic shocks.
The ADB report reiterates that ongoing improvements in expenditure efficiency are necessary, along with promoting spending that fosters growth and enhancing the capacity for implementation. These actions are crucial for achieving resilient and inclusive growth while also working to lower debt levels.
Furthermore, considering the significant role of state-owned enterprises in Fiji’s economy, the report suggests measures such as expanding regulatory and governance standards, improving operational capabilities, and establishing a framework to limit guarantees related to state-owned enterprises. These actions could provide additional fiscal space for productive investments.