All eyes will be on the 2023–2024 national budget announcement, as the government will need to find a way to address Fiji’s fiscal crisis.

Local and international economists have been quick to point out the worrisome fiscal deficit level, as despite the stagnant government revenue at 25%, its expenses have been gradually increasing over time.

Fijians should expect to see the beginning of fiscal consolidation.

ANZ International Economist Doctor Kishti Sen have stated that in order to gradually move towards a balanced budget in the future, reducing the deficit that is built into the budget will need to be considered.

Dr Sen says this means that the government will need to be strategic with its capital and operating expenses.

“You have to look at your revenue sources. Now to reduce deficit, you’re gonna cut expenditure or look for expenditure savings or you increase the revenue.”

Dr Sen says expenses have grown due to an increase in the transfer of payments to statutory bodies and an increase in capital grants for roads, infrastructure including the Tertiary Scholarship and Loan Service.

This is why the government will need to tighten eligibility for funding if it wants to reduce expenditure over time

“And on the other side of the equation is the revenue base, our view is that given that revenue has been pretty consistently stable at around 25% share of the economy, if you grow the economy, you also grow your revenue it’s quite simple and the good news is the Fiji government does have options to grow the economy and once it unleashes the private sector to create jobs and invest in the economy, the economy will grow and the government will continue to take 25% of a bigger denominator it gives you a larger revenue.”

Prime Minister Sitiveni Rabuka has hinted at picking up the playbook for fiscal consolidation, as every dollar now counts.

Rabuka says in order to rebuild our nation, it cannot be “business as usual”.

“Indeed, our economy is troubled, but it is our duty to rebuild our nation together; and together we can and we will.”

In real terms, the Fijian economy contracted by more than 22 percent from 2019 to the end of 2021.

However, the economy rebounded by 15.6 percent in 2022, with projected expansion estimated to grow further by 8 percent and 4 percent in 2024, fueled by a recovery in tourism and associated sectors.