Litia Cava 
[File Photo]
Fiji is facing a slowdown as it moves away from a tourism-led economy toward a more balanced model.
This, according to ANZ Research’s latest Pacific Insight report titled Fiji’s 2025–26 Budget is Pro-Growth, released today.
The research states that the government’s 2025-26 budget is designed to support growth by increasing spending by nearly 9 percent, lifting total expenditure to a record $4.8 billion.
This boost in spending is crucial because economic activity has slowed while new industries take time to develop.
The budget balances $3.9 billion in revenue with $0.9 billion in borrowings, signalling a continuation of high public sector involvement.
ANZ Research stresses that public spending now accounts for a quarter of Fiji’s GDP, making the government a key player in keeping the economy moving.
The budget cuts VAT from 15 to 12.5 percent and lowers import duties on essential food products.
These tax changes aim to ease inflation and encourage consumer spending. Wage increases for civil servants and a sharp rise in grants to statutory bodies will also inject money into the economy.
ANZ warns that without this government support, the economic slowdown would have been deeper.
However, the financial institution says large deficit budgets come with a cost.
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