IMF Executive Board Concludes 2025 Article IV Consultation with Fiji
IMF News, June 20, 2025
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- Published: June 20, 2025
Recent developments and macroeconomic overview
- Executive Board concluded the Article IV consultation on June 17, 2025, and endorsed the staff appraisal without a meeting.
- Aggregate GDP growth in 2024 is estimated at 3.7 percent.
- Employment recovered to pre-pandemic levels; investment has been held back by labor shortages and supply-chain challenges.
- Inflation decelerated through 2024 as the impact of the 2023 value-added tax increase faded and the nominal exchange rate appreciated.
- The public debt-to-GDP ratio declined from its 2022 peak but remained elevated at 80 percent.
- The current account deficit in 2024 is estimated to be around 6.7 percent.
- Reserve Bank of Fiji (RBF) policy rate has been maintained at 0.25 percent since early 2020.
- Fiscal stance tightened in FY2024: overall deficit declined from 7.2 percent of GDP in FY2023 (August–July) to 3.5 percent of GDP in FY2024, compared with a budgeted deficit of 4.8 percent of GDP.
Executive Board assessment and outlook
- Growth is expected to fall in 2025 to about 2.6 percent, mostly because of slowing external demand, and to take a couple of years to recover to its medium-term potential rate.
- Baseline projection implies public debt would remain elevated and FX reserve coverage would fall, leaving the external position moderately weak.
- Growth could be higher with successful structural reforms or a more favorable external environment than assumed.
- Balance of risks is mostly to the downside:
- Near term: potential worsening of trade tensions or stronger-than-expected effects.
- Medium term: vulnerabilities to natural disasters.
Policy recommendations
- Fiscal policy
- Focus on lowering public debt while continuing growth-friendly fiscal consolidation oriented toward capital spending.
- Additional adjustment measures are needed to put public debt on a clear downward path.
- Use targeted and temporary social protection measures to protect the vulnerable.
- Fiscal tightening would also help reduce external imbalances.
- Monetary policy
- Over the medium term, given potential pressures on the exchange rate peg, monetary conditions should be gradually tightened by raising the policy rate and reducing excess liquidity.
- Financial sector
- Be attentive to emerging credit risks and safeguard against money laundering risks.
- Capital account and exchange restrictions
- Authorities should avoid using exchange rate restrictions and CFMs in place of macroeconomic adjustment.
- Focus on a gradual, sequenced capital account liberalization to support high long-run growth objectives.
- Structural reform and resilience
- Raise potential growth through sustained structural reforms.
- Immediate priorities: address ageing infrastructure in electricity, water, and waste utilities; improve transport network and digital connectivity.
- Ongoing priorities: training and human capital to reduce “brain drain” and encourage foreign investment.
- Increase resilience to natural disasters and climate change; shift toward capital spending to bolster resilience.
- Governance
- Sustained political consensus and good governance are required.
- Government’s recognition of institutional reform, commitment to the rule of law, and reducing corruption and bribery is welcome; legislative progress must be matched by enforcement and addressing capacity constraints in the civil service.
Selected economic indicators (key figures from IMF staff estimates and projections)
- Output and prices
- Real GDP: 19.8 (2022), 7.5 (2023), 3.7 (2024), 2.6 (2025), 2.8 (2026), 3.2 (2027)
- GDP deflator: 2.4 (2022), 4.1 (2023), 6.3 (2024), 3.1 (2025), 3.3 (2026), 3.4 (2027), 3.5 (2028)
- Consumer prices (average): 4.3 (2022), 2.3 (2023), 4.5 (2024)
- Consumer prices (end of period): 5.1 (2022), 1.3 (2023)
- Fiscal indicators (percent of GDP, fiscal-year basis)
- Revenue and Grants: 21.4 (2022), 23.2 (2023), 27.4 (2024), 27.1 (2025), 26.8 (2026), 26.6 (2027), 26.5 (2028)
- Expenditure: 33.5 (2022), 30.3 (2023), 31.0 (2024), 31.5 (2025), 31.2 (2026), 30.9 (2027)
- Overall balance: -12.1 (2022), -7.2 (2023), -3.5 (2024), -4.4 (2025), -4.2 (2026), -4.3 (2027)
- Primary balance: -8.5 (2022), -3.3 (2023), 0.5 (2024), -0.3 (2025), -0.6 (2026), -0.7 (2027), -0.8 (2028)
- Central government debt: 90.4 (2022), 83.3 (2023), 79.5 (2024), 77.7 (2025), 77.6 (2026), 77.3 (2027), 77.0 (2028), 76.8 (2029)
- Central government external debt: 33.3 (2022), 30.6 (2023), 28.7 (2024), 26.4 (2025), 26.1 (2026), 25.8 (2027), 25.6 (2028)
- External sector (percent of GDP)
- Current account balance: -17.3 (2022), -7.7 (2023), -6.7 (2024), -7.0 (2025), -7.5 (2026), -6.9 (2027)
- Trade balance: -32.9 (2022), -32.7 (2023), -30.0 (2024), -29.1 (2025), -27.7 (2026), -27.3 (2027), -26.9 (2028), -26.4 (2029)
- Services balance: 11.8 (2022), 20.4 (2023), 20.0 (2024), 19.9 (2025), 18.4 (2026), 17.8 (2027), 17.3 (2028), 17.1 (2029), 16.5 (2030)
- Primary Income balance: -5.3 (2022), -5.7 (2023), -6.4 (2024), -6.8 (2025), -6.6 (2026), -6.0 (2027), -5.9 (2028)
- Secondary Income balance: 9.2 (2022), 10.3 (2023), 9.6 (2024), 9.0 (2025), 8.2 (2026), 8.5 (2027), 8.8 (2028), 8.9 (2029)
- Financial account balance (-= inflows): -14.0 (2022), -4.9 (2023), -4.1 (2024), -6.5 (2025)
- FDI: -1.8 (2022), -1.1 (2023), -1.6 (2024), -4.5 (2025), -5.4 (2026), -6.1 (2027), -7.3 (2028), -7.1 (2029)
- Change in reserve assets (-=increase): -2.1 (2022), 0.3 (2023), 2.9 (2024), 0.4 (2025)
- Gross official reserves (in months of prospective imports): 5.5 (2022), 5.3 (2023), 5.2 (2024), 4.4 (2025)
- Money and credit (percent change)
- Net domestic assets of depository corporations: 4.9 (2022), 12.1 (2023), 8.0 (2024), 6.4 (2025), 6.1 (2026)
- Claims on private sector: 6.7 (2022), 11.4 (2023), 10.0 (2024)
- Broad money (M3): 9.1 (2022), 6.6 (2023)
- Monetary base: 15.8 (2022), -4.0 (2023), 3.6 (2024), 1.4 (2025)
- Central Bank Policy rate (end of period): 0.25
- Commercial banks lending rate (end of period): 4.8 (2022), 4.6 (2023)
- Memorandum items
- Exchange rate, average (FJD/USD): 2.2
- Real effective exchange rate, average: 108.2 (2022), 106.4 (2023), 108.3 (2024)
- GDP at current market prices (in millions of Fiji dollars): 10,940 (2022), 12,245 (2023), 13,494 (2024), 14,286 (2025), 15,148 (2026), 16,130 (2027), 17,193 (2028), 18,342 (2029), 19,594 (2030)
- GDP at current market prices (in millions of U.S. dollars): 4,970 (2022), 5,442 (2023), 5,949 (2024), 6,257 (2025), 6,564 (2026), 6,913 (2027), 7,284 (2028), 7,674 (2029), 8,089 (2030)
- GDP per capita (in U.S. dollars): 5,450 (2022), 5,933 (2023), 6,447 (2024), 6,740 (2025), 7,030 (2026), 7,359 (2027), 7,707 (2028), 8,072 (2029), 8,508 (2030)
IMF Executive Board Concludes 2025 Article IV Consultation with Fiji; Press Release No. 25/208, June 20, 2025.