The Coalition Government has exceeded expectations during the 2023-2024 financial year, as indicated by its preliminary fiscal performance report for the previous year.
According to the provisional report, the government achieved a better-than-anticipated budget deficit and made progress in reducing debt. The recorded deficit stood at $443.6 million, which represents 3.4% of GDP, an improvement from the originally projected deficit of 4.8%. This figure also marks a significant decrease compared to the deficits of 7.1% in 2022-2023 and 12.1% in 2021-2022, suggesting more effective spending management by the government.
Total revenue for the year reached $3,645.9 million, equivalent to 27.7% of GDP. This was higher than anticipated due to better-than-expected collections from both taxes and non-tax sources, with a notable year-on-year revenue increase of 32.6%. Tax revenue amounted to $3,096.8 million, outperforming forecasts by $60.9 million, or 2.0% above expectations.
The revenue surge was primarily driven by improvements in the tourism sector and other industries. Tax collections rose by 35.5% compared to the previous year, with substantial increases noted in VAT, corporate tax, and departure tax. Non-tax revenue reached $549.2 million, which also exceeded predictions, complemented by income from dividends, grants, and asset sales.
“Strengthening fiscal and debt sustainability remains a key priority of Government,” stated Shiri Gounder, Permanent Secretary of the Ministry of Finance, in the report.
“In FY2023-2024, we have laid a solid foundation for fiscal consolidation through a mix of well-planned revenue reforms and spending strategies, alongside a robust economic recovery. Fiji’s economy is resilient, buoyed by strong performances in vital sectors such as tourism and resource-based industries, as well as improved business confidence following the announcement of the FY2024-2025 National Budget,” Gounder added.
As of the end of July 2024, the government’s debt totaled $10,309.2 million, accounting for 78.3% of GDP. This shows a decrease from the previous years, where it stood at 82.0% in 2022-2023 and 90.6% in 2021-2022, indicating progress in debt management. The composition of the debt includes 63.9% domestic debt and 36.1% external debt.
Despite these positive results, Gounder warned that certain risks persist.
“The growth momentum is expected to improve shortly with the initiation of key tourism projects and the rollout of government initiatives outlined in the budget. However, we face potential challenges from global developments, a shortage of skilled labor, weather-related disruptions, and capacity limitations in specific sectors,” he concluded.