Economy expects 3.5 percent growth in 2018

By Gary Hatigeva

THE Solomon Islands national economy under the guidance of the one-year-old Solomon Islands Democratic Coalition for Change Government (SIDCCG) is looking to grow at an average of 3.5 percent over the course of this year, just slightly below the 2017 growth of 3.7 percent.

The pickup in growth according to reports from the Ministry of Finance and Treasury was driven by improvement in agriculture, strong growth in fisheries and a stabilised level of logging activities.

Also speaking on this, Finance Minister Manasseh Sogavare confirmed and made a breakdown where he outlined that the primary sector is forecasted to contribute only 0.5 percentage points to real GDP growth in 2018, having compared with a historical average of around 1.5 percentage points, and this is due to the expected stabilisations in the value of log exports.

He said projections revealed that the manufacturing, construction and utilities sector on the other hand, is forecasted to contribute 0.6 percent to real GDP growth in 2018, which he said is in line with strong credit growth in these sectors and feedback from industry consultation.

He added that this service sector is expected to contribute 2.4 percentages in 2018, out of a total of 3.5 percentage points, and reflecting should continue strong growth in retail/trade sector, communication, transport/storage and financial intermediation.

“Growth in agriculture sector is forecasted to moderate in 2018 but still contribute around 0.6 percentage points to growth.

“The agriculture sector is one of our most labour intensive sectors and employs more than half of the total employed within the primary sector.

“Business investment, particularly in construction, plant and equipment is also expected to rise in 2018, in line with the ongoing work commencing on a number of major donor funded projects,” Mr Sogavare further explained.

The Minister of Finance and Treasury then emphasised that these investments will support growth by increasing productivity over the medium term once the projects are implemented and operational.

He concluded that in 2018, however, the investments are not forecasted to make a significant contribution to net growth due mainly to high imports.

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