The Coalition Government has exceeded expectations in its provisional final fiscal performance record for the 2023-2024 financial year. The report indicates improvements over previous years, featuring a lower-than-anticipated budget deficit alongside a reduction in debt levels.
The government reported a deficit of $443.6 million, equivalent to 3.4% of GDP. This is an improvement from the original budget estimate of 4.8% and represents a significant decrease from the deficits recorded in prior years: 7.1% in 2022-2023 and 12.1% in 2021-2022. This trend reflects a more effective management of government spending.
Total revenue for the period reached $3,645.9 million, or 27.7% of GDP, which was above expectations due to stronger tax and non-tax collections. Revenue saw a remarkable year-on-year increase of 32.6%, with tax revenue alone reaching $3,096.8 million, exceeding projections by $60.9 million, which is a 2.0% increase.
The rise in revenue can be attributed largely to improvements in tourism and other sectors. Tax collections rose by 35.5% compared to the previous year, boosted by significant increases in VAT, corporate tax, and departure tax. Non-tax revenue totaled $549.2 million, also surpassing expectations, and included income from dividends, grants, and government 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, the foundation for fiscal consolidation has been established through a mix of well-designed revenue reforms, expenditure policies, and a robust economic recovery. Fiji’s economy is thriving, supported by strong performances in crucial sectors such as tourism, as well as increased business confidence following the announcement of the FY2024-2025 National Budget,” Gounder added.
As of July 2024, the government’s debt stood at $10,309.2 million, making up 78.3% of GDP. This reflects a decrease from 82.0% in 2022-2023 and 90.6% in 2021-2022, indicating progress in debt management. The debt composition includes 63.9% domestic debt and 36.1% external debt.
Despite the positive outcomes, Gounder has warned of ongoing risks.
“The growth momentum is expected to strengthen in the near term with the initiation of significant tourism-related projects and the execution of government projects outlined in the budget. However, adverse effects from global developments, labor shortages, weather-related challenges, and capacity constraints in certain sectors present downside risks to the outlook,” he noted.