{
  "title": "IMF Executive Board Concludes 2025 Article IV Consultation with Fiji",
  "publication": "IMF News, June 20, 2025",
  "sourceUrl": "https://www.imf.org/en/news/articles/2025/06/20/pr-25208-fiji-imf-concludes-2025-article-iv-consultation",
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  "summary": "On June 17, 2025, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with Fiji, and considered and endorsed the staff appraisal without a meeting",
  "publishDate": "2025-06-20",
  "sections": [
    {
      "heading": "Recent developments and macroeconomic overview",
      "content": "- Executive Board concluded the Article IV consultation on June 17, 2025, and endorsed the staff appraisal without a meeting.\n- Aggregate GDP growth in 2024 is estimated at 3.7 percent.\n- Employment recovered to pre-pandemic levels; investment has been held back by labor shortages and supply-chain challenges.\n- Inflation decelerated through 2024 as the impact of the 2023 value-added tax increase faded and the nominal exchange rate appreciated.\n- The public debt-to-GDP ratio declined from its 2022 peak but remained elevated at 80 percent.\n- The current account deficit in 2024 is estimated to be around 6.7 percent.\n- Reserve Bank of Fiji (RBF) policy rate has been maintained at 0.25 percent since early 2020.\n- 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."
    },
    {
      "heading": "Executive Board assessment and outlook",
      "content": "- 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.\n- Baseline projection implies public debt would remain elevated and FX reserve coverage would fall, leaving the external position moderately weak.\n- Growth could be higher with successful structural reforms or a more favorable external environment than assumed.\n- Balance of risks is mostly to the downside:\n  - Near term: potential worsening of trade tensions or stronger-than-expected effects.\n  - Medium term: vulnerabilities to natural disasters."
    },
    {
      "heading": "Policy recommendations",
      "content": "- Fiscal policy\n  - Focus on lowering public debt while continuing growth-friendly fiscal consolidation oriented toward capital spending.\n  - Additional adjustment measures are needed to put public debt on a clear downward path.\n  - Use targeted and temporary social protection measures to protect the vulnerable.\n  - Fiscal tightening would also help reduce external imbalances.\n- Monetary policy\n  - 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.\n- Financial sector\n  - Be attentive to emerging credit risks and safeguard against money laundering risks.\n- Capital account and exchange restrictions\n  - Authorities should avoid using exchange rate restrictions and CFMs in place of macroeconomic adjustment.\n  - Focus on a gradual, sequenced capital account liberalization to support high long-run growth objectives.\n- Structural reform and resilience\n  - Raise potential growth through sustained structural reforms.\n  - Immediate priorities: address ageing infrastructure in electricity, water, and waste utilities; improve transport network and digital connectivity.\n  - Ongoing priorities: training and human capital to reduce “brain drain” and encourage foreign investment.\n  - Increase resilience to natural disasters and climate change; shift toward capital spending to bolster resilience.\n- Governance\n  - Sustained political consensus and good governance are required.\n  - 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."
    },
    {
      "heading": "Selected economic indicators (key figures from IMF staff estimates and projections)",
      "content": "- Output and prices\n  - Real GDP: 19.8 (2022), 7.5 (2023), 3.7 (2024), 2.6 (2025), 2.8 (2026), 3.2 (2027)\n  - GDP deflator: 2.4 (2022), 4.1 (2023), 6.3 (2024), 3.1 (2025), 3.3 (2026), 3.4 (2027), 3.5 (2028)\n  - Consumer prices (average): 4.3 (2022), 2.3 (2023), 4.5 (2024)\n  - Consumer prices (end of period): 5.1 (2022), 1.3 (2023)\n- Fiscal indicators (percent of GDP, fiscal-year basis)\n  - Revenue and Grants: 21.4 (2022), 23.2 (2023), 27.4 (2024), 27.1 (2025), 26.8 (2026), 26.6 (2027), 26.5 (2028)\n  - Expenditure: 33.5 (2022), 30.3 (2023), 31.0 (2024), 31.5 (2025), 31.2 (2026), 30.9 (2027)\n  - Overall balance: -12.1 (2022), -7.2 (2023), -3.5 (2024), -4.4 (2025), -4.2 (2026), -4.3 (2027)\n  - Primary balance: -8.5 (2022), -3.3 (2023), 0.5 (2024), -0.3 (2025), -0.6 (2026), -0.7 (2027), -0.8 (2028)\n  - 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)\n  - 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)\n- External sector (percent of GDP)\n  - Current account balance: -17.3 (2022), -7.7 (2023), -6.7 (2024), -7.0 (2025), -7.5 (2026), -6.9 (2027)\n  - 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)\n  - 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)\n  - Primary Income balance: -5.3 (2022), -5.7 (2023), -6.4 (2024), -6.8 (2025), -6.6 (2026), -6.0 (2027), -5.9 (2028)\n  - 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)\n  - Financial account balance (-= inflows): -14.0 (2022), -4.9 (2023), -4.1 (2024), -6.5 (2025)\n  - 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)\n  - Change in reserve assets (-=increase): -2.1 (2022), 0.3 (2023), 2.9 (2024), 0.4 (2025)\n  - Gross official reserves (in months of prospective imports): 5.5 (2022), 5.3 (2023), 5.2 (2024), 4.4 (2025)\n- Money and credit (percent change)\n  - Net domestic assets of depository corporations: 4.9 (2022), 12.1 (2023), 8.0 (2024), 6.4 (2025), 6.1 (2026)\n  - Claims on private sector: 6.7 (2022), 11.4 (2023), 10.0 (2024)\n  - Broad money (M3): 9.1 (2022), 6.6 (2023)\n  - Monetary base: 15.8 (2022), -4.0 (2023), 3.6 (2024), 1.4 (2025)\n  - Central Bank Policy rate (end of period): 0.25\n  - Commercial banks lending rate (end of period): 4.8 (2022), 4.6 (2023)\n- Memorandum items\n  - Exchange rate, average (FJD/USD): 2.2\n  - Real effective exchange rate, average: 108.2 (2022), 106.4 (2023), 108.3 (2024)\n  - 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)\n  - 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)\n  - 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)\n\nIMF Executive Board Concludes 2025 Article IV Consultation with Fiji; Press Release No. 25/208, June 20, 2025.\n\n---\n\n\n References\n\n- Republic of Fiji and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2025/06/20/pr-25208-fiji-imf-concludes-2025-article-iv-consultation"
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    "Published: June 20, 2025",
    "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.",
    "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:",
    "Fiscal policy",
    "Monetary policy",
    "Financial sector",
    "Capital account and exchange restrictions",
    "Structural reform and resilience",
    "Governance",
    "Output and prices",
    "Fiscal indicators (percent of GDP, fiscal-year basis)",
    "External sector (percent of GDP)",
    "Money and credit (percent change)",
    "Memorandum items",
    "[Republic of Fiji and the IMF](http://www.imf.org/external/country/FJI/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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