Inflation Drop Fails to Reflect Reality for Struggling Fijian Families

MP Premila Kumar says the recently announced -0.9% inflation rate for April 2025 — the lowest since May 2021 — may appear encouraging on paper, but it does not reflect the harsh financial reality faced by thousands of Fijian families still struggling to make ends meet.

Kumar states that while the Government is quick to claim credit for this drop, it must be honest with the public: the decline is largely the result of external global factors, such as falling international fuel prices and improved supply chains — not a result of domestic government policies.

“It’s important that people understand a drop in inflation does not mean prices are falling,” says Kumar. “It simply means the rate of increase has slowed or plateaued. For most Fijians, the cost of essentials like food, rent, transport, and healthcare remains painfully high.”

Kumar argues that the Government’s policies have actually contributed to the current cost-of-living crisis. She cites the increase of VAT to 15% on hundreds of essential goods and services as one of the most damaging moves, particularly when families and businesses were still recovering from the effects of the COVID-19 pandemic.

“While the zero VAT policy on 22 essential items is welcome, it’s not enough to offset the broader burden on struggling households,” Kumar explains. “The Government can’t claim to offer relief while simultaneously making life more expensive for the majority.”

Commenting on the Finance Minister’s much-publicised $650 million debt write-off, Kumar says it sounds generous on the surface but raises serious concerns about sustainability and fairness. “We have over 19,000 students currently studying privately because they have no access to a student loan scheme. Who is paying for this debt write-off? These are the questions we must ask.”

Kumar also criticised the recent increase in the minimum wage to $5.00 per hour, calling it insufficient to address the cost of living, especially in urban areas where rent, transport, and food costs are continually rising.

She further notes that Government praise for increased agricultural funding and record sugarcane prices is out of touch with the rural reality. “Farmers are still facing high input costs, a serious labour shortage, and poor access to markets. These are the reasons many are leaving rural areas for urban centres, deepening the inequality between communities.”

Kumar is also concerned about the lack of a long-term plan to reduce Fiji’s dependency on imports or to stimulate private sector growth. She points to unresolved challenges such as youth unemployment, the ongoing brain drain, increased reliance on foreign labour, and poor public service delivery.

“Instead of focusing on temporary economic trends and selective statistics, the Government should be investing in long-term strategies,” Kumar says. “We need to grow local businesses, develop critical infrastructure, and protect the rule of law to restore public and investor confidence.”