Fiji’s economy strengthened in 2025, with economic growth revised upward to 3.4 per cent, according to the Reserve Bank of Fiji’s Financial Stability Review 2025.
The central bank said the improved outlook reflects broad-based expansion across key sectors, supported by a strong rebound in tourism and steady domestic demand.
The Bank said growth during the year was driven by improved sectoral performance, particularly in tourism-related industries. The recovery in visitor arrivals continued to lift activity in hospitality, transport and other supporting services, providing an important boost to employment and income across the economy.
Financial system assets
Fiji’s financial system remained buoyant in 2025, with total gross assets reaching $40.9 billion as at October 31, according to the Bank’s Financial Stability Review 2025.
The report showed that commercial banks continue to dominate the financial landscape, holding 41.7 per cent of total system assets. This is followed by the Fiji National Provident Fund (FNPF), which accounts for 30.2 per cent. The Reserve Bank of Fiji itself holds 14.1 per cent of assets, while insurance companies account for 7.2 per cent.
Smaller portions of the system are held by non-bank financial institutions, credit institutions, capital markets and insurance brokers.
The central bank said the concentration of assets highlights the central role of banks and the FNPF in Fiji’s financial ecosystem. Banks remain the primary channel for credit to households, businesses and Government, while the
FNPF plays a critical role in managing retirement savings and investing in government securities.
The Review noted that while asset concentration supports efficiency and scale, it also increases systemic importance. Any disruption affecting major institutions could have wider implications for the financial system and the broader economy.
The Reserve Bank said it continues to closely monitor financial institutions’ balance sheets, liquidity positions and risk exposures to ensure stability is maintained. It added that strong regulatory oversight, adequate capital buffers and prudent risk management remain essential in safeguarding the resilience of the financial system amid domestic and global uncertainties.
Credit growth
Aggregate credit in Fiji expanded by 11 per cent to $13.4 billion in the year to October 2025, reflecting stronger financial sector activity, according to the Reserve Bank of Fiji.
The Financial Stability Review 2025 showed that credit growth accelerated from 9.5 per cent recorded in October 2024, indicating increased borrowing by households and businesses.
Commercial banks remained the dominant lenders, accounting for 79.2 per cent of total system credit, while the remaining 20.8 per cent was provided by other credit institutions, including non-bank lenders.
The Reserve Bank said credit growth is a key indicator of economic performance, as it supports consumption, investment and business expansion. However, it cautioned that rapid or sustained credit growth can also signal the build-up of financial vulnerabilities if not carefully managed.
While overall credit expansion increased, lending growth by commercial banks eased slightly to 11.3 per cent, down from 12.6 per cent in the previous year. The central bank attributed this moderation to tighter lending standards adopted by banks in response to evolving risk conditions.
The Review said credit conditions remain supportive, underpinned by improved economic activity and confidence, but highlighted the need for continued vigilance.
The Reserve Bank said it will continue to monitor lending trends, debt servicing capacity and asset quality to ensure credit growth remains sustainable and aligned with broader economic fundamentals.
Banks and FNPF dominate financial system
The Bank’s review report said commercial banks and the Fiji National Provident Fund (FNPF) continue to dominate the country’s financial system, jointly accounting for more than 70 per cent of total system assets.
According to the Financial Stability Review 2025, commercial banks hold 41.7 per cent of total assets, while the FNPF accounts for 30.2 per cent. The three systemically important banks — ANZ, BSP and Westpac — together represent 27 per cent of total financial system assets.
The central bank said banks’ dominance reflects their significant exposure to households, corporates and Government, which amplifies their systemic importance. Lending by banks remains a key driver of economic activity, supporting private sector growth and public sector financing.
The FNPF’s strong linkages to Government primarily reflect its substantial investments in Fiji Government securities. Its exposure to households is driven by its role as the country’s primary retirement savings manager.
The Reserve Bank said the concentration underscores the need for strong oversight and risk management, as shocks affecting these major institutions could have widespread effects.
It added that while concentration increases potential systemic risk, it also enables efficient financial intermediation when supported by sound governance, capital adequacy and liquidity management.
The central bank said continued monitoring of interconnected exposures and stress testing of major institutions remain priorities to ensure the stability of the financial system.
RBF flags contagion risk
The Reserve Bank of Fiji has warned that increasing interconnectedness within the financial system raises the risk of contagion if major institutions experience shocks.
In its Financial Stability Review 2025, the central bank noted that highly connected entities such as commercial banks and the Fiji National Provident Fund (FNPF) play a central role in the flow of funds across the economy.
The report said the varying size and connections of financial institutions indicate that disruptions affecting key players could transmit through multiple channels, including lending markets, government financing and household savings.
Banks’ extensive exposure to corporates, households and Government heightens their systemic importance, while the FNPF’s significant holdings of government securities and retirement funds further strengthen its interconnectedness.
The Reserve Bank said this structure calls for robust monitoring of liquidity positions, counterparty exposures and sovereign risk to mitigate systemic vulnerabilities.
At the same time, the central bank noted that interconnectedness can also improve capital flows and information sharing, supporting economic growth and financial inclusion.
The Review stressed the importance of maintaining strong regulatory frameworks, adequate capital buffers and effective risk management practices to ensure the system remains resilient.
The Reserve Bank said it will continue to assess systemic risk indicators and conduct stress testing to identify potential weaknesses and strengthen financial stability.
Household debt rises
Household debt in Fiji increased to $3.59 billion as at October 2025, recording annual growth of 14.9 per cent, according to the Reserve Bank of Fiji.
Despite the rise, the Financial Stability Review 2025 noted that household credit remains below its long-term trend, indicating no immediate systemic risk.
The Reserve Bank said the negative credit gap suggests household borrowing has not reached excessive levels, even as lending continues to expand.
Household credit growth reflects increased demand for housing, consumer spending and personal loans as economic activity strengthens. However, the central bank cautioned that sustained rapid growth could increase vulnerabilities, particularly if household incomes come under pressure.
The Review said household debt servicing capacity remains manageable, supported by stable employment conditions and improved economic prospects.
The Reserve Bank said it continues to monitor household balance sheets, loan performance and repayment behaviour to ensure risks remain contained.
It added that maintaining responsible lending standards and financial literacy initiatives will be important in preventing over-indebtedness.
Corporate credit growth
Corporate credit growth in Fiji slowed to 9.7 per cent in 2025, down from 10.9 percent recorded a year earlier, according to the Reserve Bank of Fiji.
The Financial Stability Review attributes the moderation to tighter lending standards adopted by financial institutions during late 2024 and early 2025.
The central bank said the adjustment reflects a more cautious approach to risk management amid global economic uncertainty, while still supporting productive investment.
Corporate debt levels remain sustainable, with the Review noting improvements in asset quality and declining non-performing loans across key sectors.
The Reserve Bank said businesses continue to access financing for expansion and working capital, although lending growth has become more selective.
It added that sound credit assessment and monitoring practices have helped limit the build-up of financial stress within the corporate sector.
The central bank said continued vigilance is needed to ensure corporate balance sheets remain resilient, particularly in sectors exposed to external shocks.
Key threats
The Reserve Bank of Fiji has identified climate-related disasters, cybersecurity threats and global economic uncertainty as key risks to financial stability.
In its Financial Stability Review 2025, the Bank said Fiji remains highly vulnerable to extreme weather events, which can disrupt economic activity, damage infrastructure and affect borrowers’ repayment capacity.
Cybersecurity risks were also highlighted, with the Reserve Bank noting increased digitalisation of financial services has heightened exposure to cyber incidents.
Global risks, including geopolitical tensions and shifts in international financial conditions, were identified as potential sources of stress for Fiji’s open economy.
Despite these challenges, the Reserve Bank said the financial system remains resilient, supported by strong capital buffers, adequate liquidity and healthy foreign reserves.
The central bank said it continues to strengthen supervisory frameworks, crisis preparedness and risk assessment tools to address emerging threats.
It added that collaboration with financial institutions and government agencies remains critical in safeguarding long-term financial stability.
