Solomon Islands: Staff Report for the 2005 Article IV Consultation

IMF Staff Country Reports, October 13, 2005

Source details

Canonical URL: Solomon Islands: Staff Report for the 2005 Article IV Consultation

The improvement in economic performance that began after the arrival of the Australian-led intervention force in mid-2003 has continued.
The external current account is projected to deteriorate, reflecting investment-related imports.
Reserve coverage is expected to remain comfortable despite the projected current account deterioration.
The budget is projected to record a small deficit owing to one-off factors and higher spending as capacity and wages rise.
Logging is set to decline from an unsustainable level; much depends on new private activities to replace lost incomes, exports, and government revenue.

Continued economic improvement following mid-2003 intervention.
Projected deterioration in the external current account driven by investment-related imports.
Reserve coverage assessed as likely to remain comfortable in the projection.

Budget projected to record a small deficit.
Drivers of the fiscal outcome:
- One-off factors.
- Higher spending as capacity and wages rise.

Logging noted to be at an unsustainable level and is expected to decline.
Key dependency: development of new private activities to offset reductions in:
- Household incomes.
- Export earnings.
- Government revenue.

Subject: Expenditure, External debt, International trade, Public debt
Keywords: Arrears, authority, balance of payments, broad money, CR, credit growth, current account, deficit, excess reserves, financing, Imports, ISCR, Pacific Islands, private sector, Solomon Islands debt situation, support grant, U.S. dollar