IMF Executive Board Concludes 2026 Article IV Consultation with Fiji
IMF News, May 29, 2026
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Bibliographic details
- Published: May 29, 2026
Economic activity and outlook
- Real GDP growth: 3.2 percent in 2025 (staff estimate).
- Staff assessment: economic activity remained resilient through 2025, supported by solid tourism inflows, continued remittances, and fiscal stimulus.
- Inflation dynamics: inflation fell sharply due to VAT rate reductions and lower duties on selected essential goods, then began to rise again as these temporary effects faded.
- Monetary stance: Reserve Bank of Fiji (RBF) maintained the Overnight Policy Rate at 0.25 percent.
- Shock and near-term outlook:
- Recent oil shock will challenge the recovery.
- Growth is expected to fall in 2026 because of higher oil prices, softer tourism demand, and elevated uncertainty.
- Inflation is projected to increase as rising fuel costs are reflected in domestic prices.
- Terms of trade effects from the oil shocks would widen the current account deficit.
Executive Board assessment and risks
- Directors agreed with the thrust of the staff appraisal and welcomed the continued recovery supported by tourism and domestic demand.
- Risks and vulnerabilities highlighted:
- Vulnerability to external shocks and natural disasters.
- Elevated public debt.
- Widening external imbalances.
- Persistent structural bottlenecks that constrain policy space and weigh on living standards.
- Policy priority emphasized: strengthening fiscal buffers and pursuing reforms to boost sustainable, inclusive growth.
Fiscal stance, debt, and public finance recommendations
- Fiscal stance in FY2025-26: substantially eased before the oil shocks; FY2025-26 budget targeted an overall deficit of around 6½ percent of GDP.
- Directors' concerns:
- Expansionary fiscal stance increased fiscal and financing risks while public debt remains elevated.
- Recommended actions:
- Rebuild fiscal buffers through gradual and growth-friendly fiscal consolidation.
- Prioritize targeted social assistance to help the most vulnerable.
- Strengthen public financial management, debt management, and public investment capacity.
- Reinforce the medium-term fiscal framework to strengthen policy credibility and improve transparency.
Monetary policy and exchange rate policy
- Directors' view:
- Exchange rate peg continues to serve Fiji well as a nominal anchor.
- Persistently high excess liquidity has weakened monetary policy transmission and reduced the effectiveness of the policy rate.
- Recommended actions:
- Strengthen the monetary policy operational framework.
- Gradual normalization of liquidity conditions, supported by gradually raising the policy rate.
- Gradually ease exchange restrictions and capital flow measures, while safeguarding external stability.
Financial sector and structural reforms
- Financial sector assessment:
- Financial sector remains broadly sound; banks are well capitalized and liquid.
- Vulnerabilities warrant continued vigilance.
- Recommended actions:
- Continue strengthening financial supervision, crisis preparedness, and the regulatory framework.
- Continue progress on strengthening the AML/CFT framework.
- Pursue sustained, well-sequenced structural reforms to support higher and more inclusive growth and improve resilience.
- Specific reform priorities: address infrastructure gaps, labor shortages, outward migration, and barriers to private sector development.
- Emphasize resilience-enhancing investment and engagement with development partners to strengthen capacity to adapt to climate change and natural disasters.
- Strengthen governance and reinforce the rule of law to support the investment climate.
Key statistics and projections (selected indicators from Table 1)
- Output and prices (percent change)
- Real GDP: 3.5 (2024), 3.2 (2025 Est.), 2.4 (2026 Proj.), 2.7 (2027 Proj.), 3.0 (2028 Proj.)
- GDP deflator: 6.1 (2024), -1.4 (2025 Est.), 2.2 (2026 Proj.), 2.5 (2027 Proj.)
- Consumer prices (average): 3.9 (2024)
- Consumer prices (end of period): -0.2 (2024), 0.0 (2025), 3.8 (2026)
- Fiscal (percent of GDP)
- Revenue and Grants: 27.4 (2024), 29.1 (2025), 28.2 (2026), 27.8 (2027), 28.0 (2028)
- Expenditure: 30.8 (2024), 31.5 (2025), 34.6 (2026), 32.9 (2027), 31.8 (2028)
- Overall balance: -3.4 (2024), -2.5 (2025), -6.4 (2026), -5.1 (2027), -3.8 (2028)
- Primary balance: 0.6 (2024), 1.4 (2025), -2.2 (2026), -1.0 (2027), 0.4 (2028)
- Central government debt: 79.1 (2024), 78.7 (2025), 82.5 (2026), 83.6 (2027), 83.0 (2028)
- Central government external debt: 28.6 (2024), 27.7 (2025), 30.4 (2026), 29.5 (2027), 28.5 (2028)
- External sector (percent of GDP)
- Current account balance: -7.8 (2024), -9.5 (2025), -12.5 (2026), -10.9 (2027), -9.7 (2028)
- Trade balance: -28.9 (2024), -29.8 (2025), -30.2 (2026), -28.4 (2027), -?
- Services balance: 18.8 (2024), 18.1 (2025), 16.9 (2026), 16.7 (2027), 16.5 (2028)
- Primary Income balance: -6.2 (2024), -5.3 (2025), -6.0 (2026), -5.6 (2027), -?
- Secondary Income balance: 8.5 (2024), 7.5 (2025), 6.9 (2026), 7.3 (2027), 7.8 (2028)
- Financial account balance ( - = inflows): -10.0 (2024), -7.5 (2025), -8.9 (2026), -7.3 (2027)
- FDI: -3.0 (2024), -4.6 (2025), -5.9 (2026), -6.3 (2027)
- Portfolio investment: 1.0 (2024)
- Other investment: -8.0 (2024), -3.9 (2025), -4.3 (2026), -2.4 (2027), -2.3 (2028)
- Change in reserve assets ( - =increase): 3.6 (2024), 2.1 (2025)
- Gross official reserves (in months of prospective imports): 5.5 (2024), 5.3 (2025), 4.5 (2026), 3.1 (2027)
- Money and credit (percent change)
- Net domestic assets of depository corporations: 7.9 (2024)
- Claims on private sector: 11.3 (2024), 10.0 (2025)
- Broad money (M3): 7.7 (2024)
- Monetary base: -1.6 (2024)
- Central Bank Policy rate (end of period): 0.25
- Commercial banks deposits rate (end of period): 0.3
- Commercial banks lending rate (end of period): 4.6
- Memorandum items
- Exchange rate, average (FJD/USD): 2.3
- Real effective exchange rate, average: 112.6 (2024), 107.5 (2025)
- GDP at current market prices (in millions of Fiji dollars): 13,538 (2024), 13,774 (2025), 14,419 (2026), 15,254 (2027), 16,098 (2028)
- GDP at current market prices (in millions of U.S. dollars): 5,968 (2024), 6,041 (2025), 6,352 (2026), 6,663 (2027), 7,013 (2028)
- GDP per capita (in U.S. dollars): 6,468 (2024), 6,508 (2025), 6,802 (2026), 7,093 (2027), 7,421 (2028)
Source: IMF press release "IMF Executive Board Concludes 2026 Article IV Consultation with Fiji" (May 29, 2026).