SUVA, Oct. 28 (Xinhua) -- The World Bank Group has urged Fiji to rebuild its fiscal reserves while protecting growth-enhancing investment, warning that rising import costs and external shocks are putting pressure on the Pacific island nation's economy.
The warning came in the group's first Fiji Economic Update, released in Suva on Wednesday.
The report, titled Creating Fiscal Space to Accelerate Growth, projects Fiji's economy to expand by 2.1 percent in 2026, recovering to 3.0 percent by 2028.
Public debt is expected to rise after declining from about 95 percent of gross domestic product (GDP) in 2021 to 76.9 percent in 2025, the report said, noting that recent policy measures and a new external shock have begun to reverse earlier fiscal gains.
Fiji's heavy reliance on imports has left it vulnerable to rising global fuel, freight and insurance costs.
Higher energy prices are driving up expenses across key sectors and pushing inflation higher, squeezing household purchasing power and increasing pressure on businesses.
Despite these challenges, strong remittance inflows, adequate foreign reserves and banking system liquidity continue to provide economic buffers.
The report also highlighted risks from a widening trade deficit and potential El Nino impacts on agriculture and water resources, underscoring the need for prudent fiscal management to sustain growth and create jobs. ■