Fiji has been urged to accelerate fiscal reforms after the International Monetary Fund projected government debt will climb above 82 per cent of GDP this year.
The IMF’s 2026 Article IV Consultation report states that Fiji’s public debt is expected to rise from 78.7 per cent of GDP in 2025 to 82.5 per cent in 2026, driven by an expansionary budget and higher spending commitments.
The Fund expressed concern that the FY2025-26 Budget reversed earlier progress in reducing deficits, with the fiscal deficit forecast to widen to 6.4 per cent of GDP.
According to the IMF, public debt servicing costs are becoming increasingly burdensome, with interest payments alone averaging more than 4 per cent of GDP over the medium term.
The report recommends faster fiscal consolidation, including improved tax compliance, rationalisation of tax concessions, restraint in public sector wage growth and a stronger focus on capital investment.
The IMF argued that rebuilding fiscal buffers is essential if Fiji is to withstand future shocks such as cyclones, global commodity price spikes and economic downturns.
Despite maintaining that Fiji remains at moderate risk of debt distress, the Fund warned that continued high debt levels would limit the Government’s ability to respond to future crises.
