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IMF Executive Board Concludes 2026 Article IV Consultation with Fiji
May 29, 2026
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IMF Communications Department
MEDIA RELATIONS
PRESS OFFICER: Pemba Sherpa
Phone: +1 202 623-7100Email: MEDIA@IMF.org
Washington, DC: The Executive Board of the International Monetary Fund (IMF) completed the Article IV Consultation for Fiji.[1] The authorities have consented to the publication of the Staff Report prepared for this consultation.[2]
Economic activity remained resilient through 2025. Staff estimates real GDP growth at 3.2 percent, supported by solid tourism inflows, continued remittances, and fiscal stimulus. Inflation fell sharply, driven by VAT rate reductions and lower duties on selected essential goods, but began to rise again as these temporary effects faded. The fiscal stance was substantially eased before the oil shocks, with the FY2025-26 budget targeting an overall deficit of around 6½ percent of GDP. Monetary and financial conditions remain highly accommodative, with the Reserve Bank of Fiji (RBF) maintaining the Overnight Policy Rate at 0.25 percent.
The recent oil shock will challenge Fiji’s ongoing recovery. Growth is expected to fall in 2026 because of higher oil prices, softer tourism demand, and elevated uncertainty, while inflation is projected to increase as rising fuel costs are reflected in domestic prices. The terms of trade effects from the oil shocks would widen the current account deficit, which is already somewhat larger than implied by medium-term fundamentals.
Executive Board Assessment[3]
Executive Directors agreed with the thrust of the staff appraisal. They welcomed Fiji’s continued economic recovery, supported by tourism and domestic demand. Directors noted, however, that the outlook has become more challenging following recent oil price increases. They emphasized that Fiji remains vulnerable to external shocks and natural disasters, while elevated public debt, widening external imbalances, and persistent structural bottlenecks continue to constrain policy space and weigh on living standards. In this context, Directors emphasized the importance of strengthening fiscal buffers and pursuing reforms to boost sustainable, inclusive growth.
Directors noted that the expansionary fiscal stance has increased fiscal and financing risks at a time when public debt remains elevated. They underscored the importance of rebuilding fiscal buffers, supported by gradual and growth-friendly fiscal consolidation, while prioritizing targeted social assistance to help the most vulnerable. They also urged continued efforts to strengthen public financial management, debt management, and public investment capacity. Directors considered that reinforcing the medium-term fiscal framework would further strengthen policy credibility and improve transparency.
Directors agreed that the exchange rate peg continues to serve Fiji well as a nominal anchor. They noted, however, that persistently high excess liquidity has weakened monetary policy transmission and reduced the effectiveness of the policy rate, and therefore welcomed ongoing efforts to strengthen the monetary policy operational framework. Directors noted that this would require a gradual normalization of liquidity conditions, supported by gradually raising the policy rate. They encouraged the authorities to gradually ease exchange restrictions and capital flow measures, while safeguarding external stability.
Directors considered that the financial sector remains broadly sound, with banks well capitalized and liquid, while noting that vulnerabilities warrant continued vigilance. They welcomed ongoing efforts to strengthen financial supervision, crisis preparedness, and the regulatory framework, and encouraged continued progress on strengthening the AML/CFT framework.
Directors welcomed the authorities’ reform agenda and emphasized that sustained, well-sequenced structural reforms will be critical to support higher and more inclusive growth and improve resilience. In particular, they encouraged reforms to address infrastructure gaps, labor shortages, outward migration, and barriers to private sector development. Directors also highlighted the importance of resilience-enhancing investment and continued engagement with development partners to strengthen Fiji’s capacity to adapt to climate change and natural disasters. Finally, they noted that strengthening governance and reinforcing the rule of law would be critical to supporting the investment climate.
Table 1. Fiji: Selected Economic Indicators, 2024-28 | |||||
| 2024 | 2025 | 2026 | 2027 | 2028 | |
| Est. | Proj. | ||||
| Output and prices (percent change) | |||||
| Real GDP | 3.5 | 3.2 | 2.4 | 2.7 | 3.0 |
| GDP deflator | 6.1 | -1.4 | 2.2 | 3.0 | 2.5 |
| Consumer prices (average) | 3.9 | -1.4 | 2.2 | 3.0 | 2.5 |
| Consumer prices (end of period) | -0.2 | 0.0 | 3.8 | 2.4 | 2.5 |
| Central government budget on fiscal-year basis (percent of GDP) | |||||
| Revenue and Grants | 27.4 | 29.1 | 28.2 | 27.8 | 28.0 |
| Expenditure | 30.8 | 31.5 | 34.6 | 32.9 | 31.8 |
| Overall balance | -3.4 | -2.5 | -6.4 | -5.1 | -3.8 |
| Primary balance | 0.6 | 1.4 | -2.2 | -1.0 | 0.4 |
| Central government debt | 79.1 | 78.7 | 82.5 | 83.6 | 83.0 |
| Central government external debt | 28.6 | 27.7 | 30.4 | 29.5 | 28.5 |
| External sector (percent of GDP) | |||||
| Current account balance | -7.8 | -9.5 | -12.5 | -10.9 | -9.7 |
| Trade balance | -28.9 | -29.8 | -30.2 | -28.9 | -28.4 |
| Services balance | 18.8 | 18.1 | 16.9 | 16.7 | 16.5 |
| Primary Income balance | -6.2 | -5.3 | -6.2 | -6.0 | -5.6 |
| Secondary Income balance | 8.5 | 7.5 | 6.9 | 7.3 | 7.8 |
| Capital account balance | 0.1 | 0.1 | 0.1 | 0.1 | 0.1 |
| Financial account balance ( - = inflows) | -10.0 | -7.5 | -8.9 | -7.3 | -7.5 |
| FDI | -3.0 | -4.6 | -5.6 | -5.9 | -6.3 |
| Portfolio investment | 1.0 | 1.0 | 1.0 | 1.0 | 1.0 |
| Other investment | -8.0 | -3.9 | -4.3 | -2.4 | -2.3 |
| Errors and omissions | 0.0 | 1.5 | 0.0 | 0.0 | 0.0 |
| Change in reserve assets ( - =increase) | -2.2 | -1.0 | 3.6 | 3.5 | 2.1 |
| Gross official reserves (in months of prospective imports) | 5.5 | 5.3 | 4.5 | 3.6 | 3.1 |
| Money and credit (percent change) | |||||
| Net domestic assets of depository corporations | 7.9 | 0.0 | … | … | … |
| Claims on private sector | 11.3 | 10.0 | … | … | … |
| Broad money (M3) | 7.7 | -2.3 | … | … | … |
| Monetary base | 4.5 | -1.6 | … | … | … |
| Central Bank Policy rate (end of period) | 0.25 | 0.25 | … | … | … |
| Commercial banks deposits rate (end of period) | 0.3 | 0.3 | … | … | … |
| Commercial banks lending rate (end of period) | 4.6 | 4.5 | … | … | … |
| Memorandum items | |||||
| Exchange rate, average (FJD/USD) | 2.3 | 2.3 | … | … | … |
| Real effective exchange rate, average | 112.6 | 107.5 | … | … | … |
| GDP at current market prices (in millions of Fiji dollars) | 13,538 | 13,774 | 14,419 | 15,254 | 16,098 |
| GDP at current market prices (in millions of U.S. dollars) | 5,968 | 6,041 | 6,352 | 6,663 | 7,013 |
| GDP per capita (in U.S. dollars) | 6,468 | 6,508 | 6,802 | 7,093 | 7,421 |
| Sources: Reserve Bank of Fiji; Ministry of Finance; and IMF staff estimates and projections. | |||||
[1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country's economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.
[2] Under the IMF’s Articles of Agreement, publication of documents that pertain to member countries is voluntary and requires the member consent. The staff report will be shortly published on the www.imf.org/Fiji page.
[3] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country's authorities. An explanation of any qualifiers used in summings up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.
