Economy set for comeback: CBSI

Central Bank of Solomon Islands. Photo by CBSI
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CENTRAL Bank of Solomon Islands has projected the economy to recover to 1.5 percent this year in line with global growth and anticipated recovery in fisheries, construction sectors and key national projects in the pipeline.

The national projects are Tina Hydro and facilities for the Pacific Games in 2023.

Last year, the national economy contracted to minus 4.3 percent due to the impact of the coronavirus pandemic which affected key export and productive commodities and other related economic activities.

This happened after the government imposed the containment measures combined with the international travel restrictions led to disruptions in the production and supply chain in the domestic economy.

Appearing before the Public Accounts Committee in Parliament yesterday, CBSI Governor Dr Luke Forau over the medium term (2022-2025) growth is anticipated to pick up to an average of 3.5 percent with high growth concentrated ion 2022-2023 of between five percent and six percent from booming construction activities.

However, Forau said post Pacific Games in 2024 would be more challenging, as growth would drop considerably to around one percent when infrastructures and facilities are completed.

He said a gradual decline in forestry is also anticipated over the medium term.

“However, risks to this forecast are tilted to the downside especially with the ongoing pandemic related disruptions,” he said.

Further to that, Forau said CBSI expects inflation to remain low at -1.6% in the first half of this year consistent with on going depressed demand and to improve to 3% by end of 2021 to reflect upward pressures from food and fuel prices and transitory inflationary pressures of volatile items at the market.

The PAC has scrutinised the three billion, nine hundred and five million, nine hundred and fifty one thousand and three hundred and sixty dollars ($$3,905,951,360) budget.

The hearing continues today with the Australia High Commission, New Zealand High Commission, Japanese Embassy, Ministry of Finance and Treasury, Commodity Export Marketing Authority (CEMA), Solomon Islands Broadcasting Corporation, Solomon Islands Postal Corporation, Office of Prime Minister and Cabinet and Ministry of National Planning for Development Coordination.