Rising pressure on Fiji’s economy, driven by debt concerns, cost-of-living strains and questions over fiscal management, has triggered a sharp political clash.
The debate centred on whether current policies are stabilising the country or deepening economic uncertainty.
Government MP Professor Biman Prasad defended the government’s economic strategy, saying Fiji’s high debt-to-GDP ratio was inherited and worsened during the COVID-19 period.
He said recent revenue reforms, including the consolidation of multiple VAT rates into a single system, were designed to close major loopholes that had led to an estimated $400–$500 million in revenue leakage.
“What the governor of the Reserve Bank said yesterday is directly the result of what happened in the last five months, and that’s the impact of the global fuel crisis. Now, what we did in the 2024-2025 budget, it was termed as an expansionary budget, and there are a number of policies that were implemented to prepare people for crises like this.”
He said a stronger collection had supported three consecutive years of growth above three per cent.
However, he acknowledged that external shocks, including global fuel disruptions and geopolitical tensions, were now driving affordability pressures across households.
While describing the impact as temporary, he also conceded that government size and public spending may need reassessment.
Government MP Manoa Kamikamica argued the pressure is largely externally driven and said Fiji’s economic fundamentals remain intact.
He said the government’s focus is on long-term restructuring through diversification into agriculture, digital services and infrastructure-linked investment.
He pointed to an investment pipeline he said had reached about $8 billion and highlighted business process outsourcing as a potential high-growth sector.
He also stressed the need to better utilise land and natural resources to expand economic participation, particularly for landowning communities.
Former Finance Minister Aiyaz Sayed-Khaiyum rejected that framing, arguing that fiscal measures have not translated into meaningful debt reduction and have instead increased pressure on households.
He said nominal debt continues to rise and criticised what he described as unchecked operational expenditure.
He also questioned the reliance on external shocks as the main explanation for current strain, arguing that governance and policy credibility are central to restoring investor confidence.
“Normally, prior to elections, and post elections, the private sector in particular always holds back to see what the policies are like, what will happen in the future. And that’s a challenge now.”
Sayed-Khaiyum further said close to $1 billion in approved loans remain undrawn, calling it a sign of weak confidence in policy direction.
He also raised concerns over institutional changes and warned that weakening constitutional processes undermines stability and trust.
The issue was discussed during the State of the Economy Dialogue 2026.
