THE 2025-2026 National Budget will see a slightly increased expenditure policy, in anticipation of the ongoing global trade war between the larger world economies.
Speaking at the 50th Fiji Institute of Chartered Accountants (FICA) Annual Congress yesterday, he said the global trade war continues to be a major player in all global tariffs and trade effects.
“If the global trade war continued with the major players, and the transmission mechanism works in a way that leads to an impact of our tourism, disposable income goes down in some of those countries, people cut on holidays, it may have an impact on remittances and it could translate into a slowdown in economic activities as well,” Mr Prasad said.
“In anticipation of that, we will be looking at slightly increased expenditure policy from the government in the next month and we will be trying very hard to ensure that we keep a good operational and expenditure mix.”
He said the increase may lean more towards operational expenditure and “this may change the expenditure mix a bit”.
“When you anticipate a global economic slowdown transmission onto people spending, we will have to look at a slightly bigger slide of the expenditure towards operational expenditure.
“Which means, increasing social welfare, increasing support to our farmers, additional subsidies for increased production, supporting infrastructure that will allow people to spend more money.
“That may change the expenditure mix a bit but as I said, because we are anticipating a global economic slowdown, we have to prepare ourselves in the context that we have to ensure that our GDP growth doesn’t get affected too much.”
However, Mr Prasad gave his assurance that despite the formulation of a budget around these imperatives, and challenges, there will be no additional increases in taxes in the upcoming budget.
Note: This article was first published on the print version of the Fiji Times dated June 7, 2025
