Fiji should prioritise targeted social assistance to cushion vulnerable households from rising fuel prices while advancing structural reforms to sustain long-term economic growth, the International Monetary Fund (IMF) says.
In its latest assessment, an IMF team led by Alasdair Scott cautioned against broad subsidies, noting they would place a heavy burden on public finances.
“To support those most vulnerable to fuel price increases, targeted social assistance is the best option,” Mr Scott said.
“Untargeted subsidies or price caps would be very expensive for the government and would provide less help to the most vulnerable.”
The IMF said fiscal adjustments should remain “growth-friendly”, including increased investment in development and infrastructure while avoiding unnecessary expansion of government size.
It also backed the exchange rate peg maintained by the Reserve Bank of Fiji, saying it continues to serve the economy well, though improvements in monetary policy transmission were needed.
The Fund noted Fiji’s banking sector remains stable, with strong capital and liquidity buffers, but warned that rising credit—particularly in housing and unsecured lending—should be closely monitored.
Looking ahead, the IMF stressed the importance of structural reforms under Fiji’s National Development Plan and Vision 2050.
“Achieving stronger and more durable growth will require clearer prioritization and sequencing of reforms,” Mr Scott said.
He added that boosting investment, particularly in climate-resilient infrastructure, would be critical to strengthening long-term economic resilience.
