MOODY's Investor Services has given the Fiji government a B1 rating saying it reflected a low level of economic resiliency, low government financial susceptibility to event risk.
"Some of Fiji's statistical indicators — notably external debts ratios — compare favorably against rating peers," the credit report said.
However, the ratings were constrained by other factors such as low economic resiliency as indicated by the small size of our economy and a "very low GDP per capita", it added.
"The government's financial strength is assessed as low because of the high ratios of government debt and interest payments to government revenue."
The report said this was mitigated by two factors, which were that most of the government debt was held by the Fiji National Provident Fund, which would continue to invest in government securities over the medium term.
The other factor was that the proportion of debt denominated in foreign currency was small, which meant that the government was not vulnerable to exchange rate risk or to adverse conditions in global financial markets.
The negative outlook on Fiji was also maintained by Moody's, which thought that economic growth remained lacklustre and had an adverse effect of the "trajectory of government debt".
However, the rating could improve if the trajectories of the external current account balance and the government's fiscal balance improve.
The Reserve Bank of Fiji revised its GDP growth forecast upwards in June this year from 2.3 per cent to 2.7 per cent.
Announcing this revised growth projection, governor Barry Whiteside said it incorporated the impact of the 2012 National Budget policies, the recent floods, revised outlook for the global economy and our major trading partner economies, as well as recent developments in the domestic economy.