The Reserve Bank of Fiji has warned the government that unless it moves to rein in public spending, the bank may be forced to take action by increasing interest rates.
The warning comes just ahead of the announcement of the 2005 national budget which will be tabled in parliament this morning.
The Fiji Times quotes the Reserve Bank governor, Savenaca Narube, as saying that since 2000, the government had increased its budget deficits to above five per cent of gross domestic product .
Mr Narube says macroeconomic stability must not be sacrificed for short-term gain.
He says Fiji must move away from consumption led growth to export driven growth.
Mr Narube says while tourism is booming, Fiji's exports of goods have actually declined in the last three years.