The Coalition Government exceeded expectations during the 2023-2024 financial year, as indicated by its provisional fiscal performance report for the previous year. The report revealed a decrease in the budget deficit and a reduction in government debt compared to prior years.
The government posted a deficit of $443.6 million, equating to 3.4% of GDP, which was an improvement from the originally projected 4.8% deficit. This figure is significantly lower than the deficits recorded in the previous fiscal years—7.1% in 2022-2023 and 12.1% in 2021-2022—suggesting more effective spending management by the government.
Total revenue reached $3,645.9 million, representing 27.7% of GDP, exceeding expectations due to stronger-than-anticipated tax and non-tax collections. This reflects a notable 32.6% increase in revenue compared to the previous year, with tax revenue totaling $3,096.8 million, surpassing forecasts by $60.9 million or 2.0%.
The revenue growth was primarily driven by improvements in the tourism sector and other industries. Tax collections were up by 35.5% from last year, with significant increases in VAT, corporate tax, and departure tax. Non-tax revenue also performed well, amounting to $549.2 million, benefitting from dividends, grants, and government asset sales.
Shiri Gounder, Permanent Secretary of the Ministry of Finance, emphasized that maintaining fiscal and debt sustainability is a top government priority. He noted that the fiscal consolidation path has been established through a blend of effective revenue reforms and expenditure strategies, alongside a robust economic recovery. Gounder pointed out that Fiji’s economy remains strong, bolstered by positive outcomes in key sectors, including tourism, and growing business confidence following the announcement of the National Budget for FY2024-2025.
As of July 2024, government debt stood at $10,309.2 million, or 78.3% of GDP, reflecting a reduction from previous years (82.0% in 2022-2023 and 90.6% in 2021-2022), indicating successful debt management. The composition of the debt consists of 63.9% domestic debt and 36.1% external debt.
Despite the encouraging performance, Gounder warned of potential risks ahead. He anticipates improved growth momentum in the near future, driven by the launch of key tourism projects and government initiatives outlined in the budget. However, he highlighted concerns related to global developments, skilled labor shortages, weather-related challenges, and capacity limitations in certain sectors, all of which might pose threats to this positive outlook.