Fiji economic update projects growth recovery as fiscal pressures rebuild

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Fiji economic growth update

Highlights

World Bank projects Fiji's economy to grow 2.1 percent in 2026 and recover to 3.0 percent by 2028, amid renewed fiscal pressures.
Public debt is expected to decline from about 95 percent of GDP in 2021 to 76.9 percent in 2025, before rising again due to external shocks.
The report urges targeted social support, diversified exports, expanded renewable energy, and increased private and female workforce participation to accelerate growth toward Fiji’s Vision 2050 high-income goal.

Growth outlook and fiscal risks

As reported by the World Bank, its first Fiji Economic Update, released in Suva in partnership with the University of the South Pacific, projects the economy will grow by 2.1 percent in 2026 before recovering to 3.0 percent by 2028.

The report, titled "Creating Fiscal Space to Accelerate Growth," says higher fuel and shipping costs are squeezing household budgets, while recent policy measures and a new external shock are beginning to reverse Fiji's earlier fiscal gains. Public debt, which falls from about 95 percent of GDP in 2021 to 76.9 percent in 2025, is projected to rise again.

Tatiana Proskuryakova, World Bank Group Division Director for the South and North Pacific, says Fiji has made real progress and now needs to build on it so growth supports jobs, opportunities and a more resilient future. She says better-targeted support and careful decisions on spending and revenue can protect vulnerable families while allowing continued investment in infrastructure, skills and private-sector growth.

Reform priorities for stronger resilience

The update identifies opportunities to strengthen long-term growth through a more diverse export base, expanded renewable energy and stronger agriculture and fisheries value chains, alongside increased private investment. It adds that addressing skills shortages and increasing women's participation in the workforce could further lift Fiji's productive capacity.

The report says targeted assistance for vulnerable households can provide more effective support than broad-based relief while making better use of limited public resources. It recommends focusing aid on those most in need, improving the quality of public spending, stabilizing debt and protecting investment that supports growth and jobs, while stronger social protection and disaster financing can help the country prepare for future shocks.

For Fiji to meet its Vision 2050 goal of reaching high-income status, the report says growth needs to accelerate well above the historical 2 percent to 3 percent range to about 4 percent to 6 percent. That would require higher productivity, a broader economy, greater investment in people and skills, and stronger workforce participation.

Our earlier report on sovereign resilience in a higher-rate environment outlined how prolonged geopolitical strains and elevated public spending are increasing refinancing and borrowing risks as global funding costs stay high. It also noted that emerging and frontier markets are particularly exposed because interest-service burdens tend to be heavy relative to narrower revenue bases, while energy and food price shocks add to inflation and fiscal pressure.

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