Economic growth in Fiji, the Pacific’s second-largest economy, is expected to soften in the medium term as visitor arrivals slow, pre-election uncertainty increases, and external conditions deteriorate, according to a new Asian Development Bank (ADB) report.
ADB’s flagship economic publication, Asian Development Outlook (ADO) April 2026, forecasts Fiji’s gross domestic product (GDP) growth to moderate to 2.9% in 2026 and 2.7% in 2027. Slowing trends in tourism markets are expected to persist amid challenging external conditions, while a wait-and-see approach by investors ahead of the upcoming elections dampens construction growth. However, sustained consumption strength is expected to support continued growth in agriculture, local food manufacturing and financial services.
“Fiji’s economy continues to grow, but evolving global and domestic headwinds pose serious threats that could undermine progress and development,” said Regional Director of ADB’s Pacific Subregional Office Azusa Sato. “Strengthening resilience — through sound macroeconomic management to address near-term pressures, alongside targeted social support and health system strengthening to tackle long-standing constraints — will be critical to sustaining inclusive growth.”
Fiji’s economy grew moderately in 2025, supported by steady tourism activity, agriculture and construction, which together stimulated strong private consumption. Inflation remained subdued over the year, reflecting the reduction in value-added tax (VAT) and lower import prices, resulting in mild deflation.
Inflation is projected to rebound as deflationary effects from lower VAT and import prices fade, rising to about 3.3% in 2026 before easing to around 1.9% in 2027 amid higher food and fuel costs.
The Middle East crisis has increased external uncertainties and energy price risks. A more prolonged escalation could further impact Fiji’s growth through higher prices, shipping disruptions and financial volatility, which ADB will continue to monitor closely.
The current unstable external environment poses risks to domestic resources needed to finance long-standing structural challenges, particularly non-communicable diseases (NCDs), which account for 80% of deaths and cost Fiji approximately $263 million per year. NCDs have significant long-term economic implications, and the ADB report highlights the need to further accelerate health sector reforms to raise public health expenditure to at least 5% of the country’s GDP.
ADB is a leading multilateral development bank supporting sustainable, inclusive and resilient growth across Asia and the Pacific. Working with its members and partners to solve complex challenges, ADB harnesses innovative financial tools and strategic partnerships to transform lives, build quality infrastructure and safeguard the planet. Founded in 1966, ADB is owned by 69 members — 50 from the region.
