Debt to GDP ratio to reduce to 77.8% by July this year – Prof. Prasad

The national debt-to-GDP ratio is projected to fall further to around 77.8 percent this July.

Acting Prime Minister and Minister for Finance, Professor Biman Prasad highlighted this during the Fiji Commerce and Employers Federation's State of the Economy Breakfast Talanoa.

Professor Prasad says a key priority for the Government is prudent fiscal management.

He says they have managed to reduce the debt-to-GDP ratio from 90.7 percent in the financial year of 2021-2022 to 79.4 percent in the financial year of 2023-2024.

The Acting Prime Minister says this has been largely possible due to the rapid recovery in GDP level and the Government’s strong commitment to reducing fiscal deficits as part of the fiscal consolidation strategy.

Professor Prasad says while tax reforms have played a role in revenue generation, future fiscal discipline will focus on rationalising expenditures, improving public sector efficiency, and prioritising high-impact projects.

He says their 15-year fiscal framework aims to bring Fiji’s debt ratio down to 60 percent of GDP.

He says if we want to bring our debt to GDP ratio anywhere close to 45 to 50 percent in the next 10 years, they would need a growth rate of at least 5 percent annually.

The Acting Prime Minister says from August 2024 to January 2025, they have collected around $1.8 billion in taxes which is $136.4 million higher than the forecast for the period and accounts for around 55 percent of the total budgeted tax revenues for the fiscal year.

Meanwhile, remittances increased by 6 percent in 2024 to a record of $1.3 billion and are expected to remain stable in the medium term.

Professor Prasad also stressed that the remittance will be affected as Fijians who will be returning from the U.S mean that the level of remittances will drop.