Suva, March 28 Fiji's national debt is expected to rise this year mainly due to the Covid-19 pandemic, Prime Minister Voreqe Bainimarama announced on Sunday.
In his announcement, Bainimarama said that island nation's national debt stood at 6.2 billion Fijian dollars ($2.9 billion) as of January this year and it is expected to increase to 8.3 billion Fijian dollars ($4 billion) by the end of July, Xinhua news agency reported.
He attributed the rise in national debt to the pandemic and the recent tropical cyclones.
"The increase in our debt is mainly due to the impact of Covid-19 on our economy. The two recent cyclones are also contributing factors as well as the constant flooding," he said.
The effect of the pandemic on the economy is not within Fiji's powers, hence, the expectation is that revenue may continue to be affected, the Prime Minister said, adding that Fiji like many other developing countries are expecting more support from the organisations like the World Bank and the Asian Development Bank to help in the nation's recovery effort.
According to the Reserve Bank of Fiji, since independence, the country's national debt has continued to increase as governments have continuously run budget deficits.
At the end of the financial year 2018-19, the national debt was around 5.7 billion Fijian dollars or 48.4 per cent of the GDP which was 8.7 billion Fijian dollars in 2020.
Since 2010, Fiji's national debt as a percent of GDP was on a downward trajectory led by continuously positive economic growth, new revenue measures and improved tax compliance.
The debt trajectory was expected to improve thereafter but was cut short by the onset of the pandemic and the related international travel restrictions which severely constrained the government's revenue collections and led to a record contraction in GDP.
As a result, the national debt increased to around 6.7 billion Fijian dollars or 62.8 per cent of GDP at the end of the financial year 2019-20.
As of March 25, Fiji's foreign reserves stood at 2.2 billion Fijian dollars.
As an island nation with a population of around 900,000, Fiji's tourism industry accounts for about 38 per cent of the nation's total GDP.
In recent years, Fiji has received more than 800,000 visitors per year, but the Covid-19 outbreak has brought the tourism industry to a standstill.
The Fijian economy contracted by 19 per cent last year.
( With inputs from IANS )
Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor