Fiji’s Growth Recovery Faces Fiscal Strains as World Bank Urges Wider Reforms

The World Bank Group’s first Fiji Economic Update, released in Suva with the University of the South Pacific, projects growth of 2.1% in 2026, rising to 3.0% by 2028.

Fiji has made economic gains since the pandemic, but rising costs and growing pressure on public finances are leaving the country with less room to respond to future shocks. The World Bank Group's first Fiji Economic Update, released in Suva with the University of the South Pacific, projects growth of 2.1% in 2026, rising to 3.0% by 2028. Titled Creating Fiscal Space to Accelerate Growth, the report says stronger productivity, investment and fiscal discipline will be needed to support lasting growth.

Higher fuel and shipping costs are squeezing household budgets, and recent policy measures combined with a new external shock have begun to reverse earlier fiscal gains. Public debt fell from about 95% of GDP in 2021 to 76.9% in 2025, but the report projects it will rise again. Tatiana Proskuryakova, the World Bank Group's Division Director for the South and North Pacific, said Fiji can build on its progress by ensuring growth supports jobs, opportunities and resilience.

Targeted support can protect families and public finances

The report recommends directing assistance to vulnerable households, since broad-based relief uses limited public resources without focusing help on those who need it most. It calls for better quality public spending, debt stabilization and protection of investments that support jobs and growth. Stronger social protection and disaster financing can help Fiji prepare for future shocks.

Proskuryakova said careful spending and revenue decisions can protect vulnerable families and preserve investment in infrastructure, skills and private-sector growth. Rebuilding fiscal space would give Fiji more choices to invest in people and maintain the capacity to respond to another shock. The report presents this fiscal discipline as part of a growth strategy, alongside stronger investment and a broader economy.

Diversification and skills could lift growth

The report identifies export diversification, renewable energy and stronger agriculture and fisheries value chains as opportunities to build a more resilient economy. Greater private investment could support these areas and help broaden Fiji's sources of growth. Addressing skills shortages and increasing women's participation in the workforce could help the country make fuller use of its productive potential.

Vision 2050 calls for faster expansion

Fiji's ambition to reach high-income status under Vision 2050 will require annual growth of roughly 4% to 6%, compared with the historical pace of 2% to 3%. The report says reaching that level will depend on higher productivity, a more diverse economy, greater investment in people and skills, and increased workforce participation. Its recommendations link stronger public finances with the capacity to sustain those investments and create jobs.