Economist Dr. Kishti Sen from ANZ Pacific has stressed the importance of continuing capital projects to bolster economic growth, ahead of the announcement of the Government’s 2024-2025 National Budget. He warned against overlooking these projects and believes they can stimulate private sector investment. This comes at a time when the Fijian economy is struggling with low private sector investment and a high debt-to-GDP ratio.
Dr. Sen suggests that the government should work towards reducing its need to borrow by producing smaller deficits over time. This can be done by cutting government consumption expenditure and focusing on growing the economy by 4-5% in real terms. A combination of both factors could help lower the debt-GDP ratio more rapidly, providing the government with more flexibility when implementing counter-cyclical fiscal policies – infusing money into the economy during economic downturns in the future.
Dr. Sen also urged the Government to initiate approved projects immediately, cautioning that delays could result in further costs and postpone crucial investments. He stated that Fiji requires a number of projects to get underway simultaneously, and any obstacles such as sourcing labour from abroad must be promptly addressed. If not, the risk of project costs escalating could potentially delay investments further.