{
  "title": "IMF Executive Board Concludes 2026 Article IV Consultation with Solomon Islands",
  "publication": "IMF News, July 7, 2026",
  "sourceUrl": "https://www.imf.org/en/news/articles/2026/07/07/pr26237-solomon-islands-imf-executive-board-concludes-2026-article-iv-consultation",
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  "summary": "The war in the Middle East is expected to weigh on growth, slowing it to 2.6 percent in 2026, and to raise inflation to an average of 5.4 percent.",
  "publishDate": "2026-07-07",
  "sections": [
    {
      "heading": "Near-term outlook and key projections",
      "content": "- Growth:\n  - 2024: 3.0 percent\n  - 2025 (est.): 3.5 percent\n  - 2026 (proj.): 2.6 percent\n  - Medium-term: growth expected to remain moderate, supported by agriculture, mining, and infrastructure but constrained by declining logging activity, limited diversification, and weak governance.\n- Inflation:\n  - 2024: 4.2 percent (period average)\n  - 2025: 2.7 percent (period average)\n  - 2026 (proj.): 5.4 percent (period average)\n  - 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)\n- External sector:\n  - 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.\n  - Trade balance (goods and services) and exports/imports trajectory reported in table (see Key statistics).\n- Fiscal outcomes:\n  - Fiscal deficit (central government net lending/borrowing):\n    - 2024: -2.4 percent of GDP\n    - 2025 (est.): -3.9 percent of GDP\n    - 2026 (proj.): -3.2 percent of GDP\n  - Central government debt:\n    - 2023: 23.1 percent of GDP\n    - 2024: 26.6 percent of GDP\n    - 2025: 29.5 percent of GDP\n    - 2026 (proj.): 32.1 percent of GDP\n- Other headline figures:\n  - Per capita GDP (2025): US$2092\n  - Population (2025): 798,079\n  - Quota: SDR 20.8 million"
    },
    {
      "heading": "Executive Board assessment of risks and drivers",
      "content": "- Downside risks (firmly tilted):\n  - Prolonged geopolitical tensions (notably the war in the Middle East).\n  - Domestic political instability.\n  - Budget financing constraints, including depleted cash reserves, revenue uncertainty, and limited investor capacity to absorb government bonds.\n- Upside risks:\n  - Further expansion of gold mining—conditional on robust resource management and limited fiscal incentives.\n  - Additional donor support.\n- Specific shock effects:\n  - 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."
    },
    {
      "heading": "Fiscal policy guidance and public financial management (PFM)",
      "content": "- Short-term fiscal priorities:\n  - Reduce fiscal deficits and rebuild liquidity buffers through realistic, fully financed budgeting.\n  - Cap domestically financed deficits while steadily rebuilding cash balances to avoid disruptive budget freezes.\n  - 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.\n- Revenue and expenditure recommendations:\n  - Avoid further delays in introducing a VAT.\n  - Strengthen tax enforcement and rationalize exemptions, particularly in extractive industries.\n  - Reallocate resources away from the CDFs and strengthen coordination with donors to enhance spending efficiency.\n- PFM weaknesses and immediate actions:\n  - Persistent delays in fiscal reporting, audits of government financial statements, and completion of the Pacific Games audit.\n  - Immediate priorities: resume regular inter-agency coordination meetings to facilitate fiscal reporting and complete the FMIS upgrade.\n  - Strengthen procurement, audit, and debt management capacity across government.\n- Medium-term resource management:\n  - 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."
    },
    {
      "heading": "Monetary policy, exchange rate, and central bank operations",
      "content": "- Policy stance and exchange rate:\n  - 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.\n  - 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.\n  - Primary response to pressures: allow the exchange rate to move in line with the currency basket.\n  - Adopt a coherent foreign exchange market policy to strengthen policy consistency and communication with market participants.\n- Operational reform priorities:\n  - Staff welcomes CBSI’s commitment to modernizing monetary policy operations; encourage phased but steady implementation.\n  - Near-term priorities: gradually absorb excess liquidity in the banking system and introduce standing facilities linked to the policy rate.\n  - Establishing effective monetary policy operations would help manage potential surges in foreign exchange inflows associated with mining expansion."
    },
    {
      "heading": "Financial sector stability, inclusion, and integrity",
      "content": "- Assessment:\n  - The financial sector remains broadly sound but has gaps in financial stability, inclusion, and integrity.\n- Recommended priorities:\n  - Upgrade legal and regulatory frameworks.\n  - Strengthen risk-based supervision.\n  - Establish a framework for crisis management.\n  - Complete the rollout of outstanding National Payment System components to support financial inclusion.\n  - Expedite legal reforms to establish a robust AML/CFT system."
    },
    {
      "heading": "Structural reforms, diversification, governance, and climate",
      "content": "- Diversification and governance:\n  - Diversifying the economy and addressing governance weaknesses are key to sustainable, inclusive growth.\n  - Support productivity in agriculture, improve the business environment, and address infrastructure gaps.\n  - Accelerate governance reforms, including advancing legislation in extractive sectors and resuming implementation of the National Anti-Corruption Strategy.\n- Climate change:\n  - Slow-moving climate change expected to have incremental but meaningful cumulative effects on the economy and debt trajectory over the long term.\n  - Need for adaptation policies, particularly to mitigate impacts on populations vulnerable to sea-level rise.\n  - Critical first step: build basic PFM capacity to prioritize, execute, and monitor climate-relevant projects."
    },
    {
      "heading": "Capacity development priorities and data issues",
      "content": "- Near-term IMF CD priority: strengthen core capacity for sound macroeconomic management.\n- Data shortcomings that hamper surveillance: national accounts and GFS.\n- 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."
    },
    {
      "heading": "Key statistics (selected from Table 1)",
      "content": "- Nominal GDP (in SI$ millions):\n  - 2023: 12,615\n  - 2024: 13,392\n  - 2025: 14,431\n  - 2026 (proj.): 15,625\n  - 2027: 16,657\n  - 2028: 17,707\n  - 2029: 18,832\n  - 2030: 20,052\n  - 2031: 21,344\n- Nominal GDP (in US$ millions):\n  - 2023: 1,506\n  - 2024: 1,584\n  - 2025: 1,733\n  - 2026 (proj.): 1,876\n  - 2027: 2,000\n  - 2028: 2,126\n  - 2029: 2,262\n  - 2030: 2,408\n  - 2031: 2,563\n- 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)\n- 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)\n- 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)\n- 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)\n- 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)\n- 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)\n- 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)\n- Broad money (percent change): 6.1 (2023), 23.5 (2024), 10.0 (2025), 8.0 (2026), 6.4 (2027)\n- Reserve money (percent change): 9.9 (2023), 13.3 (2024), 8.6 (2025), 15.0 (2026)\n- Current account balance (percent of GDP): -11.4 (2023), -4.2 (2024), -3.4 (2025), -3.5 (2026), -3.1 (2027)\n- 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)\n- 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)\n- 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)\n- Reserves (in months of next year's imports of GNFS): 8.5 (2023), 10.8 (2024), 11.0 (2025)\n\nIMF Executive Board Concludes 2026 Article IV Consultation with Solomon Islands, Press Release No. 26/237 (July 7, 2026).\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2026/07/07/pr26237-solomon-islands-imf-executive-board-concludes-2026-article-iv-consultation"
    }
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    "Published: July 7, 2026",
    "Growth:",
    "Inflation:",
    "External sector:",
    "Fiscal outcomes:",
    "Other headline figures:",
    "Downside risks (firmly tilted):",
    "Upside risks:",
    "Specific shock effects:",
    "Short-term fiscal priorities:",
    "Revenue and expenditure recommendations:",
    "PFM weaknesses and immediate actions:",
    "Medium-term resource management:",
    "Policy stance and exchange rate:",
    "Operational reform priorities:",
    "Assessment:",
    "Recommended priorities:",
    "Diversification and governance:",
    "Climate change:",
    "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.",
    "Nominal GDP (in SI$ millions):",
    "Nominal GDP (in US$ millions):",
    "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)",
    "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)",
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    "[PRESS CENTER](http://presscenter.imf.org/)",
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