World Bank warns Fiji growth slowing as debt nears 80% of GDP

Fiji’s economic growth is expected to slow to 2.7 per cent this year while public debt remains close to 80 per cent of gross domestic product, the World Bank has warned.

The concerns were raised during the launch of the Pacific Economic Update at the World Bank Group office in Suva yesterday.

The report, presented by World Bank Senior Economist Ekaterine Vashakmadze, Lead Economist for the Pacific Ralph Van Doorn and Country Economist Ruth Nikijuluw, projected regional growth across 11 Pacific Island countries would fall below three per cent in 2026, averaging just two per cent this decade compared with three per cent in the 2010s.

Ms Vashakmadze said Pacific nations were no longer facing isolated economic crises, but a constant cycle of overlapping global shocks.

“Shocks should not be taken as temporary disruptors – they are becoming more the normal of our operation at any level,” she said.

For Fiji, the World Bank projects inflation will rise to 3.2 per cent this year after two years of relatively low price growth, driven by fuel costs and softer global tourism conditions.

The report said Fiji’s public debt remained among the highest in the Pacific region, highlighting the urgent need to strengthen fiscal discipline and create more private sector-led jobs.

World Bank Group Division Director Stephen Ndegwa said the Pacific’s current growth model was failing to create enough opportunities for people, particularly young people entering the workforce.

“Average growth across Pacific economies is projected to remain around two per cent this decade, while too many young people are still struggling to access productive work,” Mr Ndegwa said.