Fiji’s financial management has been praised for its strong discipline as the government wrapped up the 2024–2025 fiscal year with a remarkable deficit of only 2.4 percent of GDP, a significant improvement from previous forecasts. This achievement, highlighted in the recent Westpac Wave Fiji Economic Update and Outlook, marks the most favorable fiscal deficit since the 2016–2017 fiscal year and stems from effective revenue collection strategies and prudent financial practices.
The total government revenue for the year reached an unprecedented $4.05 billion, surpassing both initial and updated financial targets. This revenue boost included a 12.2 percent increase in tax revenues year-on-year, totaling $3.48 billion. The impressive growth was largely attributed to improvements in corporate tax, value-added tax (VAT), and personal income tax. Notably, VAT collections alone surged by $173.4 million compared to the previous year, reflecting the successful implementation of revenue reforms and increased compliance efforts.
On the expenditure side, the government maintained a disciplined approach, with total spending amounting to $4.39 billion, which is 1.2 percent lower than the revised estimates. Both operational and capital expenditures were kept below forecasted levels, demonstrating a commitment to responsible fiscal management and careful prioritization of governmental spending.
Consequently, Fiji’s debt-to-GDP ratio has improved, now standing at 77.1 percent, down from 79.0 percent the previous year, indicating enhanced debt sustainability. Westpac noted that this fiscal performance is a sign of the government’s dedication to maintaining fiscal discipline and fostering economic stability.
Looking ahead, Westpac has advised caution for FY2025–2026, projecting a deficit of $886 million, translating to 6.0 percent of GDP, which could mark one of the highest nominal deficits in Fiji’s history. Nonetheless, the government holds robust cash reserves of nearly $900 million as of August 2025, providing a cushion for liquidity and flexibility in managing debt.
The report emphasizes that the recent fiscal achievements signal a positive trend toward fiscal prudence in Fiji, establishing a solid groundwork for future economic stability. However, the journey ahead will demand continued diligence, efficient project implementation, and a diversified approach to revenue generation to maintain fiscal resilience and promote ongoing economic development.