Fiji’s Finance Ministry has warned Government against taking on any more debt in the next two years in light of the debt level expected to increase to around $10 billion (US$5 billion)by the end of July this year.
In its Medium Term Fiscal Strategy 2024-2026 tabled in Parliament last week, the ministry said Fiji’s debt level had been exhausted and taking any further debt is “almost unthinkable”.
“Given the unprecedented increase in debt levels, the fiscal space has been exhausted,” the ministry said.
“‘In fact, the room for any further increase in debt is almost non-existent.
“As such, Government needs to consolidate its fiscal position to rebuild fiscal buffers and reprioritise resources towards infrastructure development, expand social protection and improve overall services.”
The ministry also said Government at the same time must ensure debt to GDP ratio is sustainable and on a downward trajectory in the medium term.
“In view of this, post-pandemic economic recovery must be driven by the private sector and policies and reforms should be targeted towards removing bottlenecks and bureaucracy and creating an enabling environment for investment.
“This medium-term fiscal strategy covering the period, the financial year 2023-2024 to the financial year 2025-2026 is a critical one as there is an urgent need to address the high public debt situation which is a great concern for the Coalition Government.
“As such, the overriding objective of the medium-term fiscal strategy is to bring back fiscal discipline.
“Government will have to cut on wastages and ensure a return to fiscal sustainability.
“However, Government needs to strike a delicate balance between ensuring fiscal sustainability and having the flexibility to manoeuvre fiscal policy to support economic growth and inclusive development.”…PACNEWS
SOURCE: FIJI TIMES/PACNEWS