ANZ Economist forecasts stronger Fiji growth

ANZ Senior Pacific Economist Dr. Kishti Sen believes Fiji's economy is poised for stronger growth than projected in the 2026-27 National Budget. Sen suggests the budget's revenue forecasts were based on a conservative, worst-case economic outlook.

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The forecasts assume real GDP growth of 1.5% in 2026 with nominal GDP rising of four percent versus baseline assumptions of three percent and 5.5% respectively.

While the budget assumes real GDP growth of 1.5% for 2026, with nominal GDP rising by 4%, Sen's forecast indicates a more robust performance. He anticipates real GDP growth of 3% in 2026, increasing to 3.4% in 2027. Sen attributes this optimism to several stabilizing factors, including the global economy's resilience to oil price shocks and Fiji's consistent stream of overseas remittances, which bolster household consumption.

Furthermore, Sen points to the sustained influx of tourists, with visitor arrivals up 2.3% compared to last year, supporting jobs in the vital tourism sector. Agricultural exports have also shown strength, with revenue increasing by 5% last year. These positive trends indicate that consumer demand and private investment remain well-supported.

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The worst-case scenario assumes a “period of heightened external and domestic challenges, including weaker global growth, natural disasters and lower investor confidence.”

Sen's projections suggest that if realized, Fiji's government revenue will surpass budgeted amounts, potentially leading to a lower deficit and reduced debt for the 2026-27 fiscal year. He notes that while the government faces competing priorities, its prudent fiscal approach, focusing on controlling operational expenditure, is crucial for addressing the structural deficit and ensuring the return of public finances to a balanced state.

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However, Dr Sen forecasts real GDP growth will be stronger than the budget is forecasting.

Looking ahead, Sen believes that as Fiji continues to develop its resources for agriculture and emerging industries like business process outsourcing, economic growth will play a significant role in improving the nation's fiscal position. He forecasts real GDP growth of 2.7% for 2026 and 2027, strengthening to 3.2% in 2028.

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Remittances this year are tracking higher than the record $1,200m receipts in 2025.