The 2026-2027 National Budget’s 7 per cent deficit is a responsible response to Fiji’s economic realities rather than a sign of poor fiscal management, according to Minister for Finance Esrom Immanuel.
Speaking at the Dialogue Fiji National Budget Forum in Suva on Wednesday, Mr Immanuel rejected criticism that the size of the deficit reflected fiscal irresponsibility, saying the Government had been forced to make difficult decisions amid significant external pressures.
“Some commentators, particularly politicians, have argued that a budget with a seven (7) per cent deficit cannot possibly be described as responsible,” he said.
“I respectfully disagree. Responsibility is not determined simply by numbers. Responsibility is about the choices Government makes when confronted with extraordinary circumstances.”
Mr Immanuel said the budget had been formulated during one of Fiji’s biggest external economic shocks since the COVID-19 pandemic, with the global fuel crisis expected to slash Government revenue by about $200million.
To create fiscal space, he said Government reduced operational spending across ministries by about 10 per cent.
“We cut travel. We cut workshops. We reduced communications, maintenance, operational goods and services, and a range of discretionary spending.
“As a result, total expenditure has largely been maintained at around the current year’s level despite these new commitments.”
Mr Immanuel challenged critics of the budget deficit to identify which essential services or assistance programs they would eliminate to reduce borrowing.
“I believe they should also tell the people of Fiji exactly what they would have cut.”
He questioned whether critics would support reducing civil service salaries, social welfare payments, the guaranteed $85 per tonne sugarcane price, the $200 Back-to-School Assistance, tertiary scholarships, free education, free medicine, free water or subsidised electricity for vulnerable households.
Mr Immanuel also dismissed suggestions that the Government should have raised taxes instead.
He asked whether critics wanted higher VAT, the removal of zero-rating on 22 basic food items, higher income and corporate taxes or increased duties on imported raw materials.
“I do not believe any sensible economist, policymaker or politician would seriously advocate these options during a crisis.”
