The Government will borrow about $1.4 billion in the 2026-2027 financial year to finance its budget deficit, repay maturing debt and fund major capital projects, permanent secretary for Finance Shiri Gounder confirmed.
Speaking at a press conference following the delivery of the 2026-2027 National Budget last Friday, Mr Gounder said the borrowing program was necessary to support the Government’s response to the current economic crisis while investing in infrastructure.
“In terms of the borrowing mix, given that we have a deficit of $1 billion, we will borrow around $1.4 billion in this upcoming financial year, $1 billion for the deficit financing, and around $400 million for the payment of principal debt,” Mr Gounder said.
“Of that, around $600 million or so will come from external sources, and the remainder from domestic financing from FNPF, but all of this borrowed funds would be channelled for capital projects.”
He said the Government had already secured much of the financing required, giving it the confidence to maintain a budget deficit of 7 per cent despite the country’s fiscal challenges.
“One of the reasons we were confident enough to maintain a higher deficit … is we have already secured the financing that was supposed to be excess in the current financial year.”
Mr Gounder said development partners, including the Asian Development Bank (ADB), the World Bank, the Investment Facility for the Pacific (IFP) and the Japan International Cooperation Agency (JICA) had increased their financial support after recognising Fiji’s fiscal pressures.
“For example, we were working with the ADB on a $US100 million loan facility. In light of the crisis, they have increased it to $US150 million.
“Asian Development Bank, we are working on a $US100 million loan financing, they have increased it to $200 million.
“This basically shows that the development partners understand the situation, and they are increasing the financing, knowing that these funds are needed at this point in time.”
Despite the increased borrowing, Mr Gounder stressed the current level of deficit could not continue indefinitely.
“However, moving forward, we cannot sustain this level of deficit, and government will have to take tough actions moving forward to reduce the deficit to below 3 per cent.”
