Fiji’s limited fiscal space to absorb potential future disturbances remains a cause for concern, states the Asian Development Bank’s Pacific Economic Monitor released last week.
ADB states to sustain robust economic growth and enhance economic resilience, the government must concentrate on improving expenditure efficiency, enhancing budget execution, and advancing major private investment projects.
“This includes streamlining immigration and business application processes, which are crucial in boosting new economic activities and facilitating the private sector’s increase in hotel capacity.
“While the current emphasis on fiscal consolidation is necessary to reverse the trend of public debt, strengthening fiscal buffers and maintaining macroeconomic stability are equally critical due to Fiji’s susceptibility to economic shocks.
“Fiji’s limited fiscal space to absorb potential future disturbances remains a cause for concern, highlighting the need for ongoing efforts to improve expenditure efficiency.
“Promoting growth-oriented spending and strengthening implementation capacity are paramount for fostering resilient and inclusive growth while reducing debt levels.
“Given the pivotal role of state-owned enterprises in the economy, measures such as broadening regulatory and governance standards, enhancing their capabilities, and establishing a framework to limit state-owned enterprise guarantees can create additional fiscal leeway for productive investments.”
