IMF Executive Board Concludes 2026 Article IV Consultation with Solomon Islands
IMF News, July 7, 2026
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- Published: July 7, 2026
Near-term outlook and key projections
- Growth:
- 2024: 3.0 percent
- 2025 (est.): 3.5 percent
- 2026 (proj.): 2.6 percent
- Medium-term: growth expected to remain moderate, supported by agriculture, mining, and infrastructure but constrained by declining logging activity, limited diversification, and weak governance.
- Inflation:
- 2024: 4.2 percent (period average)
- 2025: 2.7 percent (period average)
- 2026 (proj.): 5.4 percent (period average)
- CPI (period averages reported through 2031): 5.1 (2023), 4.2 (2024), 2.7 (2025), 5.4 (2026), 4.8 (2027), 4.1 (2028), 3.9 (2029), 3.4 (2030), (2031 value not provided)
- External sector:
- Current account balance: surplus of 5.6 percent of GDP in 2025 (staff estimate); projected to return to a deficit of 3.4 percent of GDP in 2026.
- Trade balance (goods and services) and exports/imports trajectory reported in table (see Key statistics).
- Fiscal outcomes:
- Fiscal deficit (central government net lending/borrowing):
- 2024: -2.4 percent of GDP
- 2025 (est.): -3.9 percent of GDP
- 2026 (proj.): -3.2 percent of GDP
- Central government debt:
- 2023: 23.1 percent of GDP
- 2024: 26.6 percent of GDP
- 2025: 29.5 percent of GDP
- 2026 (proj.): 32.1 percent of GDP
- Other headline figures:
- Per capita GDP (2025): US$2092
- Population (2025): 798,079
- Quota: SDR 20.8 million
Executive Board assessment of risks and drivers
- Downside risks (firmly tilted):
- Prolonged geopolitical tensions (notably the war in the Middle East).
- Domestic political instability.
- Budget financing constraints, including depleted cash reserves, revenue uncertainty, and limited investor capacity to absorb government bonds.
- Upside risks:
- Further expansion of gold mining—conditional on robust resource management and limited fiscal incentives.
- Additional donor support.
- Specific shock effects:
- The war in the Middle East is expected to slow growth to 2.6 percent in 2026 and raise inflation to an average of 5.4 percent, reflecting higher fuel prices; it also contributes to a projected return to a current account deficit of 3.4 percent of GDP in 2026.
Fiscal policy guidance and public financial management (PFM)
- Short-term fiscal priorities:
- Reduce fiscal deficits and rebuild liquidity buffers through realistic, fully financed budgeting.
- Cap domestically financed deficits while steadily rebuilding cash balances to avoid disruptive budget freezes.
- Measures to mitigate the impact of the war should be strictly time-bound, preserve price signals, be as targeted as possible, and be well coordinated with donors.
- Revenue and expenditure recommendations:
- Avoid further delays in introducing a VAT.
- Strengthen tax enforcement and rationalize exemptions, particularly in extractive industries.
- Reallocate resources away from the CDFs and strengthen coordination with donors to enhance spending efficiency.
- PFM weaknesses and immediate actions:
- Persistent delays in fiscal reporting, audits of government financial statements, and completion of the Pacific Games audit.
- Immediate priorities: resume regular inter-agency coordination meetings to facilitate fiscal reporting and complete the FMIS upgrade.
- Strengthen procurement, audit, and debt management capacity across government.
- Medium-term resource management:
- Begin considering a medium-term fiscal framework to manage mineral resource revenues; effective implementation requires strengthening basic PFM functions, including realistic budgeting and timely, reliable fiscal reporting.
Monetary policy, exchange rate, and central bank operations
- Policy stance and exchange rate:
- The CBSI should remain ready to tighten monetary policy in response to inflationary pressures from the Middle East war, while avoiding ad‑hoc exchange rate adjustments.
- The current fixed exchange rate regime is calibrated to limit exchange rate volatility and support price stability; adherence is essential to preserve policy credibility and transparency.
- Primary response to pressures: allow the exchange rate to move in line with the currency basket.
- Adopt a coherent foreign exchange market policy to strengthen policy consistency and communication with market participants.
- Operational reform priorities:
- Staff welcomes CBSI’s commitment to modernizing monetary policy operations; encourage phased but steady implementation.
- Near-term priorities: gradually absorb excess liquidity in the banking system and introduce standing facilities linked to the policy rate.
- Establishing effective monetary policy operations would help manage potential surges in foreign exchange inflows associated with mining expansion.
Financial sector stability, inclusion, and integrity
- Assessment:
- The financial sector remains broadly sound but has gaps in financial stability, inclusion, and integrity.
- Recommended priorities:
- Upgrade legal and regulatory frameworks.
- Strengthen risk-based supervision.
- Establish a framework for crisis management.
- Complete the rollout of outstanding National Payment System components to support financial inclusion.
- Expedite legal reforms to establish a robust AML/CFT system.
Structural reforms, diversification, governance, and climate
- Diversification and governance:
- Diversifying the economy and addressing governance weaknesses are key to sustainable, inclusive growth.
- Support productivity in agriculture, improve the business environment, and address infrastructure gaps.
- Accelerate governance reforms, including advancing legislation in extractive sectors and resuming implementation of the National Anti-Corruption Strategy.
- Climate change:
- Slow-moving climate change expected to have incremental but meaningful cumulative effects on the economy and debt trajectory over the long term.
- Need for adaptation policies, particularly to mitigate impacts on populations vulnerable to sea-level rise.
- Critical first step: build basic PFM capacity to prioritize, execute, and monitor climate-relevant projects.
Capacity development priorities and data issues
- Near-term IMF CD priority: strengthen core capacity for sound macroeconomic management.
- Data shortcomings that hamper surveillance: national accounts and GFS.
- Other immediate CD priorities: strengthen PFM, establish a medium-term fiscal framework for managing resource revenues, improve monetary policy and foreign exchange operations, and enhance financial sector stability.
Key statistics (selected from Table 1)
- Nominal GDP (in SI$ millions):
- 2023: 12,615
- 2024: 13,392
- 2025: 14,431
- 2026 (proj.): 15,625
- 2027: 16,657
- 2028: 17,707
- 2029: 18,832
- 2030: 20,052
- 2031: 21,344
- Nominal GDP (in US$ millions):
- 2023: 1,506
- 2024: 1,584
- 2025: 1,733
- 2026 (proj.): 1,876
- 2027: 2,000
- 2028: 2,126
- 2029: 2,262
- 2030: 2,408
- 2031: 2,563
- Total revenue and grants (percent of GDP): 40.1 (2023), 37.2 (2024), 39.0 (2025), 37.8 (2026), 37.7 (2027), 37.3 (2028), 37.4 (2029), 36.6 (2030), (2031 value not provided)
- Revenue (percent of GDP): 25.2 (2023), 25.4 (2024), 28.2 (2025), 27.3 (2026), 28.0 (2027), 28.4 (2028), 28.5 (2029), 28.7 (2030)
- Grants (percent of GDP): 14.8 (2023), 11.8 (2024), 10.7 (2025), 10.5 (2026), 9.7 (2027), 9.1 (2028), 9.0 (2029), 8.7 (2030), 7.9 (2031)
- Total expenditure (percent of GDP): 44.2 (2023), 39.6 (2024), 42.8 (2025), 41.9 (2026), 40.9 (2027), 40.3 (2028), 39.9 (2029), 39.1 (2030)
- Net acquisition of nonfinancial assets (percent of GDP): 12.0 (2023), 7.7 (2024), 10.9 (2025), 10.1 (2026), 9.8 (2027), 9.6 (2028), 9.5 (2029), 9.3 (2030), 8.8 (2031)
- Central government debt (percent of GDP): 23.1 (2023), 26.6 (2024), 29.5 (2025), 32.1 (2026), 34.1 (2027), 34.9 (2028), 35.3 (2029), 35.6 (2030), 35.9 (2031)
- Public external debt (percent of GDP): 13.6 (2023), 17.7 (2024), 20.2 (2025), 22.8 (2026), 24.7 (2027), 25.6 (2028), 26.0 (2029), 26.2 (2030), 26.4 (2031)
- Broad money (percent change): 6.1 (2023), 23.5 (2024), 10.0 (2025), 8.0 (2026), 6.4 (2027)
- Reserve money (percent change): 9.9 (2023), 13.3 (2024), 8.6 (2025), 15.0 (2026)
- Current account balance (percent of GDP): -11.4 (2023), -4.2 (2024), -3.4 (2025), -3.5 (2026), -3.1 (2027)
- Exports (percent of GDP): 40.4 (2023), 52.4 (2024), 50.0 (2025), 47.4 (2026), 45.7 (2027), 43.4 (2028), 42.9 (2029)
- Imports (percent of GDP): 57.7 (2023), 53.8 (2024), 55.5 (2025), 61.9 (2026), 59.3 (2027), 57.3 (2028), 56.3 (2029), 55.4 (2030), 54.7 (2031)
- Gross official reserves (in US$ millions, end of period): 678.8 (2023), 683.3 (2024), 814.9 (2025), 931.6 (2026), 1,029.3 (2027), 1,114.0 (2028), 1,194.6 (2029), 1,276.8 (2030), 1,359.5 (2031)
- Reserves (in months of next year's imports of GNFS): 8.5 (2023), 10.8 (2024), 11.0 (2025)
IMF Executive Board Concludes 2026 Article IV Consultation with Solomon Islands, Press Release No. 26/237 (July 7, 2026).
