Ritika Pratap 
[Source: Josua MN 2020/ Flickr]
The chair of the Fiscal Review Committee Richard Naidu warns that Fiji is facing a triple threat.
Speaking at the National Economic Summit, Naidu stresses that the high debt-to-GDP ratio will constrain Fiji’s borrowing that is needed to undertake investments.
“But we must still urgently invest in physical and human capital. If not our quality of life and our long-term economic growth is threatened. Even the assumptions that we make today about our road and bridge network surviving, about there being water in our taps. Those are the things that we assume will continue. Those are actually at risk.”
Naidu adds Fiji does not have the financial headroom to respond to shocks which include severe tropical cyclones, and future pandemics.
Chair of the Fiscal Review Committee Richard Naidu.
The World Bank in its Public Expenditure Review has stated that Fiji’s fiscal deficit widened from 3.7 percent of GDP in financial year 2019 to 11.4 percent in financial year 2021.
It says the deficit is estimated to have further increased to 12 percent of GDP in financial year 2022, as lagging revenue impacts coincided with continued expenditure pressures to support economic recovery.
The World Bank further states the effect on public debt has been severe, with debt ratios almost doubling from a pre-crisis level of below 50 percent of GDP to over 90 percent by the end of financial year 2022.
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