Government debt reached $10.8 billion by the end of October 2025, marking a slight increase of 0.5 percent from the previous quarter and a 2.3 percent rise compared to the same period last year. The latest Government Debt Report for the first quarter of the 2025–2026 financial year reveals that this level of debt constitutes 73.8 percent of the Gross Domestic Product (GDP), with forecasts indicating it could climb to 79.8 percent by the financial year’s end.
The report emphasizes that domestic debt makes up the bulk of government borrowings, accounting for 65.6 percent of the total debt stock, which translates to approximately $7.1 billion. External debt, on the other hand, comprises 34.4 percent, totaling about $3.7 billion. Over the quarter, the government engaged in new borrowings amounting to $211.4 million, predominantly from domestic sources, while external borrowing was notably limited.
Debt servicing costs for the government reached $303.1 million during this period, which includes $176.2 million in principal repayments and $126.9 million in interest payments. The Ministry of Finance has underscored that the ongoing burden of these servicing costs remains a significant strain on government finances.
The report also details financing agreements completed with various developmental partners throughout the quarter. Notably, in September 2025, the Asian Development Bank finalized an agreement for the Healthy Oceans and Water Security Improvement Project valued at about $376 million. This ambitious initiative is set to enhance water supply services and protect marine ecosystems in the Greater Suva Area.
Further strengthening these partnerships, the World Bank’s International Development Association signed agreements in October 2025 for the Pacific Healthy Islands Transformation Project, which amounts to around $224 million. This project aims to improve access to quality healthcare services, particularly concerning the management of non-communicable diseases.
The Ministry of Finance also reports positive progress in discussions for additional concessional financing with various development partners. These discussions seek to provide support for trade facilitation, health, and agricultural initiatives. The government remains devoted to prudent debt management while ensuring vital funding is secured for essential developmental projects, fostering optimism for ongoing progress and enhanced growth in the future.