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ANZ has reported that Fiji’s 2022-23 National Budget shows restraint in public sector spending even though an election is due to be called soon.

The bank says looming elections usually see incumbent governments loosen constraints in an attempt to accelerate spending on previous and new promises.

It stated the national budget is also less aggressive on new revenue initiatives with modest changes to government subsidies, tax concessions, tax rates and superannuation settings.

It says even though revenue collapsed by nearly 50 percent because of the pandemic, the new budget appears to be driven largely by the principle of budget repair.

The bank says total expenditure will rise by only 7.4 percent in 2022-2023 to $3,812 million before falling by 0.3% in 2023-24 and flatlining for the next six years.

It says revenue is expected to rise as demand escalates.

ANZ adds that official estimates see the net deficit improving to -7.4% of GDP in 2022-23 from -13.8% last fiscal year and begins on a downward path to -0.5 percent of GDP by 2029-30.

It says this will bring the debt to GDP ratio to 67.8% by the end of decade from 89.4% currently.