Solomon Islands ‘real’ Gross Domestic Product (GDP) growth rate in 2017 is forecasted to be around 3.2 percent and average between 3.5 percent over the medium term.
Minister of Finance and Treasury, Hon Snyder Rini announced this in Parliament, Wednesday morning when presenting the 2017 Supplementary Appropriation Bill 2017 to the House at the Second Reading Stage.
The supplementary bill seeks the approval of the house for the regularisation of Government expenditures incurred under the Contingency Warrant Provision Section 58 and Advance Warrants Provision Section 60.
Variations to allocations within the 2017 Budget are also included in this bill to fund a number of pressures emerging in the first quarter of 2017.
The total appropriation the bill seeks approval for stands at $13,746,052-Million and of this sum $8.0-Million are for expenditures under Contingency Warrants, $1.0-Million for expenditures under Advance Warrants and $4.7-Million for additional supplementation.
Minister Rini said the GDP growth rate this year is owed to the sustained levels of production in the logging sector.
He said the ‘real’ GDP growth rate was forecasted to have been around 3.0 percent and that reflected a continued strong growth in the agriculture, logging and also in the major sectors.
Minister Rini said in 2016 inflation as measured by the Honiara Consumer Price Index increased in year average terms to 0.6 percent, as compared to the Mid-year Budget Update inflation forecast of 2.8 percent.
He said decline in headline inflation in 2016 reflected the impact of sharp declines in global energy and commodity prices.
The Minister of Finance and Treasury said the decline in inflation has significantly contributed to slow revenue collections in 2016 and also rolled over into the first quarter of 2017, resulting in lower revenue collections mainly in Inland Revenue goods tax due to decline in fuel prices.
He said PAYE collections in Customs and Excise are also below target in this first quarter of 2017.
Meanwhile, the details of the expenditures of the 2017 Supplementary Appropriation Bill 2017 as outlined by Minister Rini are as follows:
· $8.0-Million for cost of uniforms for Police and Correctional Services under the Ministry of Police, National Security and Correctional Services.
· $1.0-Million from the European Union-GZ Adapting to Climate Change and Sustainable Energy programme towards pilot projects with Selwyn College and Solomon Islands National University for the installation of solar-powered generation under the project ‘Coping with Climate Change in the Pacific Region’ for the replacement of diesel-powered generation with Solar Hybrid Generation under the Ministry of Environment, Climate Change, Disaster Management and Meteorology.
· $0.3-Million revised to cater for purchase of motor vehicle for six nationwide statistical survey projects under the Ministry of Finance and Treasury;
· $4.7-Million revised for the cost of implementing six nationwide statistical projects under the Ministry of Finance and Treasury;
· $7.9-Million revised for the cost of various other charge under the Ministry of Police, National Security and Correctional Services; and
· $55-Million revised funding towards the National Transport Initiatives programme under the Ministry of Infrastructure Development.
Expounding on supplementary variations, Minister Rini said this bill does not supplement the original 2017 Budget approved by Parliament in 2016.
As such, he said the additional expenditure pressures will be sourced from savings identified within the 2017 Appropriation Act to offset costs related to the additional expenditure pressures.
He said the Government will continue to face budget pressures and new challenges and some of these are included in this supplementary appropriation and more is expected in the coming months.
But despite the budget pressures, The Minister of Finance and Treasury assured that the Government will ensure it responds fairly to critical needs of the people of Solomon Islands in a responsible and transparent manner.
He said Cabinet has agreed as condition for approving this supplementary budget to work through the Ministry of Finance and Treasury to review the 2017 Budget as part of the Mid-year Budget Update in July and implement measures to reprioritise areas which are wasteful and not critical to the implementation of the Democratic Coalition of Change Government priorities.
- PM Press Secretariat