BY LORETTA B MANELE
Global growth is projected to fall from an estimated 3.3% in 2024 to 2.8% in 2025, before recovering to 3% in 2026.
Harry Kuma, Minister for Finance and Treasury (MoFT) revealed the above figures prior to reading the “2025 Supplementary Appropriation Bill 2025” in parliament on Tuesday, August 5, 2025.
Speaking on the global economic outlooks which impacts Solomon Islands economy, he explained that the above prediction is 0.5% each point lower than the January forecast, and is largely due to increased tariffs around the world.
“And indirectly trade linkages below with high global uncertainty and deteriorating confidence,” Kuma added.
He said GDP (Gross Domestic Product) in advanced economies is projected to drop to 1.4% in 2025 and 1.5% in 2026 due to tariffs and policy uncertainty.
“The United States will only grow 1.8% next year, while other advanced economies registered even worse revisions for 2025 and 2026. Emerging market economies are predicted to display 3.7% growth in 2025 and 3.9% in 2026,” said Kuma.
Meanwhile, China’s growth prospects as noted also fell to 4% for both 2025 and 2026 after the tariffs have been partially offsetting the strong results of 2024.
The finance minister stated that overall, trade measures lead to heightened uncertainties regarding growth, inflation and economic policy.
He also mentioned that potential trade wars could exacerbate macroeconomic instability by awakening resilience and eroding policy buffers.
“Limits imposed to international development assistance will affect growth prospects for emerging markets. Heightened debt distress will also lead to fiscal adjustments, which will disproportionately affect the weakest members of society,” said Kuma.
He highlighted that in regards to our domestic economy, Solomon Islands real GDP growth projections for 2025 has been revised down to 2.6% from an early estimate of 3.3%.
Kuma said the drop reflects mounting global and domestic challenges.
“Globally, weaker demand, disrupted trade flows and low commodity prices strongly impact small trade-dependent economies like the Solomon Islands,” he noted.
For feedback, contact:[email protected]
