Finance Minister, Professor Biman Prasad has asserted that Fiji's debt-to-GDP ratio has decreased from approximately 90% in 2022 to around 78% by the end of July 2024, indicating a 12 percentage point reduction over this period.
However, during this timeframe, Fiji's total debt has actually increased. According to the Ministry of Finance's 2023-2024 Annual Debt Report, the total government debt rose from $9,747.5 million in the fiscal year 2023 to $10,309.2 million by the end of July 2024, marking a 5.8% increase.
The observed reduction in the debt-to-GDP ratio, despite the
increase in absolute debt, can be attributed to significant economic growth as
Fiji recovered from the impacts of the COVID-19 pandemic. The resurgence of key
sectors, particularly tourism, has bolstered GDP, thereby improving the
debt-to-GDP ratio. This suggests that the decrease in the ratio is more a
result of GDP growth rather than an actual reduction in debt levels.
Hon. Prasad should show us how the increase in absolute debt has benefited the nation rather than attempting to mislead us by giving us a false sense of security. He needs to be telling us how much more are we spending on operating costs and how much are we spending on capital expenditures. He should enlighten us why 3 major factories have closed down in the last couple of months. He must understand that he cannot continue to fool the people.
In summary, while the debt-to-GDP ratio has declined, this
is primarily due to GDP growth after the national economy recovered from the
effects of Covid-19, rather than a decrease in total debt. The absolute debt
has continued to rise, underscoring the importance of prudent fiscal management
to ensure long-term economic sustainability.
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