ANZ Pacific Economist Kishti Sen has remarked on the 2025-26 National Budget, highlighting its provision of policy and legislative certainty as vital for enhancing confidence in Fiji’s private sector. This confidence is crucial for both local and international investment, which Sen believes is essential for the nation’s economic health.
Sen pointed out that with a well-executed economic blueprint, Fiji’s debt-to-GDP ratio is poised to decrease, potentially leading to smaller deficits in future budgets. He suggested that there is a real opportunity for the country to not only achieve budget surpluses but also start reducing its debt within the next decade. With the announcement of a $4.8 billion financial plan for the upcoming fiscal year, this marks the largest fiscal expenditure program in Fiji’s history, to be financed through domestic revenue growth and borrowings.
Moreover, Sen noted the importance of maintaining current government spending to support the economic transition from a tourism-centric model to a more diversified economy, emphasizing that public demand contributes significantly to GDP. He indicated that a critical aspect of sustaining this transition is the strength of government stimulus.
Looking forward, Sen noted that forecasts predict a rise in consumer prices by just 1.1% this year. However, he expressed skepticism about whether these forecasts adequately account for VAT reductions and lowered import duties that could alleviate costs for consumers. With expectations of decreasing oil prices driven by global economic slowdowns, there’s potential for inflation in Fiji to remain below the anticipated levels.
The government’s fiscal plan includes ongoing strategies to manage its budget deficit responsibly, aiming to finance both current and matured debts while fostering economic growth. Sen described his outlook on Fiji’s economic future as optimistic, largely due to anticipated investments over the next decade.
Previously, similar articles have documented Fiji’s struggles with successive deficits and their impact on the national debt. Budget strategies discussed in recent months have underlined the importance of fiscal prudence and collaboration with the private sector to stimulate not only job creation but also overall economic resilience.
Overall, the budget indicates a proactive approach to navigate present economic challenges while setting the stage for a more balanced economic landscape, encouraging both public and private sector investments that can spur growth and sustainability in Fiji.
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