Fiji’s fiscal management has been praised for showing commendable discipline, as the government closed the 2024–2025 financial year with a deficit of just 2.4 percent of GDP, well below initial projections.
According to the latest Westpac Wave Fiji Economic Update and Outlook, this marks the lowest fiscal deficit since 2016–2017, reflecting prudent management and improved revenue collection.
Total government revenue reached a record $4.05 billion, surpassing both original and revised targets.
The report noted that tax collections rose by 12.2 percent to $3.48 billion, driven by stronger-than-expected performance in corporate tax, VAT, and personal income tax.
“VAT collections alone rose by $173.4 million compared to the previous year,” the report said.
“These gains demonstrate the effectiveness of revenue reforms and strong compliance efforts.”
Expenditure was also contained, with total spending coming in at $4.39 billion, or 1.2 percent below the revised estimate.
Both operating and capital expenditures were lower than forecast, which Westpac attributed to “realistic fiscal controls and careful prioritisation.”
As a result, Fiji’s debt-to-GDP ratio declined to 77.1 percent, down from 79.0 percent the previous year — a significant improvement in debt sustainability indicators.
“The FY2024–2025 outcome reflects commendable fiscal discipline,” the report stated.
“This performance highlights the government’s strong commitment to fiscal responsibility and economic stability.”
However, Westpac cautioned that the outlook for FY2025–2026 warrants careful management.
The new budget projects a deficit of $886 million, or 6.0 percent of GDP, one of the highest in nominal terms in Fiji’s history.
Despite this, the government’s cash reserves of nearly $900 million as of August 2025 provide a healthy liquidity buffer and flexibility in debt management.
“The challenge now is to maintain this discipline amid higher spending plans.”
“Realistic budgeting, efficient capital project execution, and continued revenue diversification will be vital to sustaining Fiji’s fiscal resilience.”
Westpac concluded that Fiji’s recent fiscal outcome “underscores a welcome return to fiscal prudence” and sets a strong foundation for future economic stability.
