Economist urges balanced budget to ease cost-of-living pressures

With many Fijian families continuing to face rising living costs, the 2026-2027 National Budget should prioritise support for businesses, create more jobs and provide targeted assistance to households under financial pressure, according to a Fiji National University economist.

Acting Head of the Department of Economic Development and Sustainable Studies at Fiji National University's College of Business, Hospitality and Tourism Studies, Ashwin Deo, said the budget needed to strike a careful balance between supporting economic growth, assisting vulnerable households and maintaining fiscal responsibility.

“I believe the upcoming budget should focus on key areas such as supporting businesses and economic growth, investing in productivity and job creation, and providing targeted assistance to families facing cost-of-living pressures,” Mr Deo said.

He said Fiji was preparing its budget at a time when the economy faced significant challenges, including rising fuel prices, increasing living costs and slower economic growth.

Mr Deo noted that inflation had risen to 3.9 per cent, while economic growth was now projected at 1.5 per cent, down from the earlier forecast of 3.0 per cent.

He said economic theory suggested governments should support growth through targeted investments while protecting vulnerable households during periods of uncertainty.

However, he cautioned that government spending needed to be carefully managed because Fiji's national debt now exceeded $11 billion, representing more than 80 per cent of Gross Domestic Product (GDP).

“From a public finance perspective, government policy should strike a balance between the objectives of allocation, distribution, and stabilisation, while maintaining fiscal sustainability,” Mr Deo said.

He said long-term economic growth would depend on improving productivity through strategic investment.

“In my view, long-term growth depends on improving productivity through strategic investments in education, skills development, infrastructure, and technology.”

Mr Deo said the recent fuel crisis had reinforced the need for greater investment in renewable energy to reduce Fiji's dependence on imported fuel.

He also called for broader investment beyond tourism.

“While tourism remains Fiji’s primary foreign exchange earner, I strongly believe that greater investment in agriculture, fisheries, digital services, and other export industries will help build a more resilient economy. The future is not tourism versus diversification; it is tourism plus diversification.”

Mr Deo said while supporting economic growth and vulnerable households remained important, policymakers also needed to consider the long-term impact of borrowing.

“While supporting economic growth and vulnerable households remains important, we must also ensure that today’s borrowing does not become an unsustainable burden on future generations. Careful debt management will be essential in achieving this balance.”

He said the challenge for policymakers was to balance economic growth, social support and fiscal responsibility.

“Ultimately, the challenge for policymakers is to balance economic growth, social support, and fiscal responsibility to ensure a stronger and more sustainable future for Fiji.”