Fiji’s ratings have been lowered to ‘B+’ based on the prolonged pandemic-related economic strain by Melbourne’s S&P Global Ratings.
The ratings company states that travel restrictions associated with the COVID-19 pandemic are proving more protracted than they previously expected and weigh heavily on Fiji’s tourism-dependent economy.
It adds that relatively large fiscal deficits are driving Fiji’s government debt-to-GDP ratio higher and setting back previous plans for budget consolidation.
“We have therefore lowered our long-term sovereign credit ratings on Fiji to ‘B+’ from ‘BB-‘. The outlook is stable, reflecting our view that a reopening of international borders will cause tax receipts to rise and the debt burden to stabilize over the next few years,” it said.
“The stable outlook reflects our expectation of an economic recovery in 2022, following a deep contraction over the preceding two years. As vaccination rates rise and international travel resumes, we expect the combination of renewed GDP growth and higher tourism earnings to lead to narrower fiscal and current account deficits and a stabilizing public debt burden.”
