The Coalition Government has exceeded expectations during the 2023-2024 financial year, as indicated by its provisional final fiscal performance report for the previous financial year.
The report reveals a notable improvement compared to earlier years, showcasing a reduced budget deficit along with a decrease in national debt. The government recorded a deficit of $443.6 million, equivalent to 3.4% of GDP, which is an improvement from the 4.8% deficit predicted in the original budget. This figure also represents a significant reduction from the deficits of 7.1% in 2022-2023 and 12.1% in 2021-2022, suggesting that the government is exercising better control over its spending.
Total revenue for the year reached $3,645.9 million, or 27.7% of GDP, surpassing expectations due to stronger-than-anticipated tax and non-tax revenues. This figure reflects a significant increase of 32.6% from the previous year. Tax revenue alone amounted to $3,096.8 million, exceeding forecasts by $60.9 million, which is 2.0% above what was anticipated.
This improvement is largely attributed to economic gains in tourism and other sectors. Tax collections saw a 35.5% rise compared to the previous year, with notable increases in VAT, corporate tax, and departure tax. Non-tax revenue also performed well, totaling $549.2 million, which surpassed expectations and included income from dividends, grants, and sales of government assets.
Shiri Gounder, Permanent Secretary of the Ministry of Finance, highlighted that enhancing fiscal and debt sustainability remains a critical priority for the government. He noted that fiscal consolidation efforts have been solidified through effective revenue reforms and expenditure strategies, along with a robust economic recovery. Gounder pointed out that Fiji’s economy remains strong, supported by positive performances in key sectors such as tourism and improving business confidence following the announcement of the upcoming fiscal budget for 2024-2025.
As of the end of July 2024, government debt stood at $10,309.2 million, which is 78.3% of GDP. This figure marks an improvement from previous years, down from 82.0% in 2022-2023 and 90.6% in 2021-2022, indicating progress in managing debt levels. Currently, the debt composition is made up of 63.9% domestic debt and 36.1% external debt.
Despite these positive developments, Gounder warned that risks persist. He noted that while growth is expected to strengthen in the near term with the initiation of key tourism projects and governmental initiatives from the budget, there are potential negative impacts stemming from global events, labor shortages, weather-related challenges, and limitations in certain sectors that could affect the outlook.