Pacific Economist Kishti Sen believes there will be some good news in the 2024-25 National Budget, as the revised budget deficit for 2023-24 will likely come in smaller than what was originally predicted.

In Sen’s view, the deficit will be in the two to three percent range, as opposed to the 4.8 percent of Gross Domestic Product that was projected when the current budget was announced last year.

Sen explains the reason behind this is that the government has been able to control its expenses particularly its operating expenses.

“So the bottom line is this, the total expenditures will be lower than forecast and the decline in expenses, I believe, it will most likely swamp any falls in revenue, delivering a smaller deficit in the 380 million dollar ballpark, which equates to about minus 2.8 percent of GDP. Now, the question you may ask is this, why is this good news, a smaller deficit? Well, a smaller deficit tips the scales in the government’s favor when it comes to borrowing power.”

Kishti Sen

Sen expects the government to pump more money into health, infrastructure, education, as well as law and order sectors, however, he says they do not have a magic wand to fulfill all its promises at once.

“You’ve got to remember too that they have limited resources and competing priorities. So I would like the government to pick one and say, look, this year, we will go all out on health and try and improve health service across the country, so that our service delivery aligns better with the expectations of the community, so the people benefit from it. And I think if you can concentrate on one and then slowly move on to the other priority areas while still providing enough support so the other sectors.”

Sen further states that the government may also consider providing some tax relief or one-off transfer payments to households as compensation for the elevated price inflation environment in Fiji.

The government budgeted $4.3 billion in total spend for the 2023-24 fiscal year ending 31 July 2024 to be funded by $3.7 billion from consolidated revenue and $0.6 billion in borrowings.