Solomon Islands: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Solomon Islands
IMF Staff Country Reports, January 21, 2022
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- Solomon Islands: 2021 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Solomon Islands
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Bibliographic details
- Published: January 21, 2022
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400200106.002
Overview
- Strong and timely containment measures have successfully prevented a domestic COVID-19 outbreak but have also weighed on economic activity and aggravated pre-existing socio-economic tensions.
- Following a contraction in 2020, growth is projected to recover gradually starting this year and to gain strength as containment measures are relaxed and borders re-opened.
- Elevated pandemic-related uncertainties as well as longstanding social, economic and governance challenges and vulnerability to natural disasters pose headwinds to inclusive growth.
- Despite strong external buffers, weaker fiscal position increases vulnerability to shocks, while the decline in logging weighs on fiscal revenues and growth prospects.
Economic outlook and risks
- Growth trajectory:
- Contraction in 2020.
- Projected gradual recovery starting this year, with stronger growth as containment measures are relaxed and borders re-opened.
- Key risks and headwinds:
- Elevated pandemic-related uncertainties.
- Longstanding social, economic, and governance challenges.
- Vulnerability to natural disasters.
- Decline in logging affecting fiscal revenues and growth prospects.
Fiscal and external position
- External sector:
- Strong external buffers are in place.
- Fiscal position:
- Weaker fiscal position increases vulnerability to shocks.
- Decline in logging is a negative factor for fiscal revenues.
Policy implications (as indicated in the report summary)
- Maintain effective public health containment to prevent domestic COVID-19 outbreaks while addressing the economic costs of such measures.
- Prepare for gradual reopening:
- Policies to support recovery as containment measures are relaxed and borders re-opened.
- Strengthen resilience:
- Address pandemic-related uncertainties, social, economic, and governance challenges, and natural disaster vulnerability to support inclusive growth.
- Fiscal management:
- Mitigate increased vulnerability from a weaker fiscal position and respond to revenue pressures from the decline in logging.
Content in this bundle
- 1slbea2022001