As Fiji prepares for the 2026/27 National Budget, I believe our economy faces significant challenges, including rising fuel prices, increasing living costs, and slower economic growth. Inflation has risen to 3.9 per cent, while economic growth is now projected at 1.5 per cent, down from the earlier forecast of 3.0 per cent.

Economic theory suggests that during periods of uncertainty, governments should support growth through targeted investments while also protecting vulnerable households. However, spending must be carefully managed given Fiji’s elevated debt, which now exceeds $11 billion and represents more than 80 per cent of GDP.

From a public finance perspective, government policy should strike a balance between the objectives of allocation, distribution, and stabilisation, while maintaining fiscal sustainability. In my view, long-term growth depends on improving productivity through strategic investments in education, skills development, infrastructure, and technology.

I believe the upcoming budget should focus on key areas such as supporting businesses and economic growth, investing in productivity and job creation, and providing targeted assistance to families facing cost-of-living pressures.

The recent fuel crisis has also highlighted the need for greater investment in renewable energy and reducing Fiji’s dependence on imported fuel. While tourism remains Fiji’s primary foreign exchange earner, I strongly believe that greater investment in agriculture, fisheries, digital services, and other export industries will help build a more resilient economy. The future is not tourism versus diversification; it is tourism plus diversification.

While supporting economic growth and vulnerable households’ remains important, we must also ensure that today’s borrowing does not become an unsustainable burden on future generations. Careful debt management will be essential in achieving this balance.

Ultimately, the challenge for policymakers is to balance economic growth, social support, and fiscal responsibility to ensure a stronger and more sustainable future for Fiji.

ENDS

By Fiji National University’s (FNU) College of Business, Hospitality and Tourism Studies (CBHTS) Acting Head of Department of Economic Development and Sustainable Studies, Mr Ashwin Deo.

DISCLAIMER: The views expressed are those of the author in their capacity as an economist and do not necessarily reflect the views of the University.