Prasad flags rising debt and weak reforms

Fiji faces a persistent economic challenge stemming from the disconnect between its ambitious long-term development plans and their actual implementation, stated Professor Biman Prasad, a government Member of Parliament and former Finance Minister. Speaking at the State of the Economy Dialogue 2026, Prasad highlighted that while Fiji has a clear roadmap under the National Development Plan and Vision 2050 to achieve high-income status, the country will not reach this goal through conventional approaches.

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Fiji’s core economic challenge is the gap between long-term plans and actual delivery.

Prasad identified tourism as Fiji's primary economic strength, benefiting from its location, environment, and existing infrastructure. However, he cautioned that an over-reliance on this single sector leaves the economy susceptible to external shocks. Efforts to diversify into agriculture, fisheries, manufacturing, and high-value exports have progressed slowly and unevenly, he noted.

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the country will not achieve this through business as usual.

The former minister pointed to repeated global shocks as significant setbacks for development. He described the current global fuel crisis as one of the most severe in recent years, comparable to the oil shocks of the 1970s and the 2008 global financial crisis. These events have fueled inflation, increased debt pressure, and caused currency instability in Fiji. Unlike the COVID-19 pandemic, where job losses were the main concern, the current crisis is characterized by rising living costs, even with stable employment, which continues to strain households.

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heavy reliance on the sector leaves the economy exposed to external shocks.

Prasad emphasized that Fiji's recovery must be viewed in context, noting that the economy was already slowing in 2019 before the pandemic exacerbated an already weak fiscal position and increased debt levels. He acknowledged that government reforms since 2022, including tax changes and efforts to reduce the budget deficit (from 7.2% in 2022 to an estimated 2.5-3.4% later), and a drop in debt-to-GDP (from 91.8% in 2022 to about 79% in 2025), show progress. However, he stressed that these improvements do not signify full stability, as fiscal recovery remains fragile and vulnerable to shocks. Prasad supported borrowing for essential infrastructure like health and education but stressed the need for a balance with fiscal discipline. He also highlighted social support programs, including over $170 million in back-to-school assistance and approximately $650 million in debt write-offs, alongside reforms in state-owned enterprises and support for small and medium businesses, underscoring the importance of improving the ease of doing business.

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fiscal recovery was still fragile and exposed to shocks.