THE Fijian government aims to reduce its deficit gradually from 2.8 per cent in 2013 to 2.5 per cent in 2014 and 1.5 per cent by 2015.
This could be achieved by boosting revenue through continued supply stimuli (tax cuts and additional investment incentives) and modest reductions in operating expenditure, according to the Asian Development Bank's Pacific Economic Monitor: December 2012 report.
The latest assessment, which covers 14 countries, touched on Fiji's economic conditions and progress throughout the year.
"Consumer and investor confidence is seen to improve as the planned general elections in 2014 approach which would bode well for achievement of the government's deficit reduction targets," the report said.
Meanwhile, the report noted recent developments contributing to economic growth including improvements to the tourism sector.
"Tourism continues to be the major source of economic growth and foreign exchange. Fiji's gross earnings from tourism in 2012 are expected to top $600m, more than the combined revenues of the country's top five merchandise exports — fish, water, garments, timber and gold," the report said.
"According to the Reserve Bank of Fiji, travel-related cash receipts increased by 7 per cent during the first seven months of 2012.
"The government has invested heavily in the sugar industry over the past few years and this appears to be abiding improved mill efficiency and sugar content of cane.
"The total sugar crop is estimated to have decreased by 14.3 per cent in 2012 due to the January and March floods but the government projects it will return to in 2011 levels in 2013." Ministry of Finance permanent secretary Filimoni Waqabaca said bulk of the nation's debt was raised domestically and only a little portion was raised from abroad. He said Fiji's debt was not exposed to external exchange rate fluctuations or interest rate.