FIJI and its neighbouring Pacific island developing economies need to reduce budget deficits and initiate broader based tax reforms.
The advice from the United Nations Economic and Social Commission for Asia and the Pacific was part of its findings in the Economic and Social Survey of Asia and the Pacific 2012 report.
The report, launched in Suva on Thursday, hailed recent progress in fiscal management in the subregion as a welcome development that should be sustained to build fiscal space for responding to economic shocks.
"To achieve long-term fiscal sustainability, the Pacific island developing economies need to reduce their budget deficits and initiate broader based tax reforms.
"These economies should also continue their efforts to advance fiscal consolidation and wind down public debt," the report said.
The UNESCAP said in a media advisory, the performance of the United States economy was important to some Pacific island developing economies as the major source of remittance inflows to these economies is from nationals living in the US.
"The performance of the tourism sector is also important to the economic prospects of many economies in the Pacific, as was the case in 2011 when the tourism sector rebounded in mid-2011 and contributed to economic growth in several economies.
"There are clear signs of strong competition for tourists among Pacific destinations," the UNESCAP said.
Improving the resilience of the Pacific island developing economies to future economic and financial shocks was an continuing challenge, the UNESCAP said.
The UNESCAP suggested short-term measures such as maintaining inflation levels at an acceptable level so that the poor were not affected in a significant way.
It also recommended addressing unemployment through deliberate job creation opportunities and, continuing to review and refine social protection policies so that those living below poverty levels were looked after.