Republic of Fiji: 2026 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of Fiji

The 2026 Article IV Consultation highlights that in Fiji the economy faces rising inflationary pressures driven by higher fuel prices, while public debt is expected to remain elevated despite gradual fiscal consolidation. Increased energy costs are likely to strain foreign reserves, with downside risks stemming from further oil price shocks, higher borrowing costs, constrained public investment, structural bottlenecks, supply-side limitations, and natural disasters. The key policy challenge is to balance cost-of-living pressures with the need to restore fiscal sustainability and support long-term growth. Recommended measures include allowing fuel prices to adjust while protecting vulnerable households through targeted social assistance. Achieving a fiscal surplus of two percent by FY2029–30 would help reduce public debt below 70 percent by FY2032–33. Public expenditure should be reoriented toward productive capital investment to strengthen growth. In addition, liquidity conditions should be normalized to improve monetary policy transmission, while structural reforms should focus on strengthening implementation capacity, encouraging private investment, improving public investment management, and enhancing climate resilience.