THE national economy is growing and the government’s finance has been sound in the last two months.
This economic growth and financial stability were recorded after the country came out of the COVID-19 pandemic and Honiara November 2021 Riot.
The Ministry of Finance and Treasury (MoFT) Permanent Secretary Dentana Mckinnie told a press conference on Tuesday that Solomon Islands Gross Domestic Product (GDP) grew by 3.5 percent in 2023, compared to the previous projection of 2.7 percent.
Mr McKinnie said this growth was primarily driven by a strong performance in the mining, fishing, and agriculture sectors, with modest pickups in the construction and manufacturing activities.
In addition, he said the health, public administration and education sectors have also positively contributed to the growth during the year.
“Looking ahead to 2024, preliminary number revealed that real GDP growth is projected to remain positive at 4.1 percent.
“This is driven by the industry and service sectors, as well as the primary sector, particularly in the mining, fishing, construction, wholesale and trade, agriculture, and other services,” Mr McKinnie added.
Mr McKinnie said these sectors are projected to collectively offset the expected decline in the forestry sector.
“It was confirmed that final revision will be distributed during the June, 2024 Mid-Year update,” he added.
On fiscal performance, Mr McKinnie said SIG finance is sound and secured during the first two months of this year.
“Total actual revenue collections for the first two months of 2024 amounted to $497.47 million, or 2 percentage points ($11.9 million) below estimated revenue collections in the first 2 months in 2024. This is due to lower-than-expected collections in non- tax revenue.
“The Customs and Excise Division (CED) revenue collections for the first two months, however, was 12 percent higher than expected.”
Mr McKinnie said the positive collection in CED was driven by log revenue, import duties and excise duties.
He said logging revenue collections in the first two month was much higher compared to the same periods in 2016 and 2017 due to the exports of 2023 stockpiled logs.
Furthermore, Mr McKinnie said revenue from the Inland Revenue Division was 7 percent higher than what was estimated for collection in the first two months of 2024.
He said this is primarily due to higher-than-expected revenue collection from Company tax, Personal tax and withholding in the first two months in 2024.
Mr McKinnie said other Ministry revenue collection for the first two months of 2024 was around $19.02 million, lower than the 2024 budget estimates of $70.4 million.
In terms of SIG expenditure, he said total expenditures in the first two months amounted to $511.08 million. Big ticket expenditure items during the first two months included the followings:
- 2024 National General Election
- Education grants
- Health Grants
- SINU Grants
- Scholarship
- Terminal grants
- Riot support.
Mr McKinnie also stated that all Joint Election-related resources are secured and ring-fenced.
He also stated that MoFT is committed to build its cash reserves and ensure the management of governments fiscal operations remains sound.
Mr McKinnie said this is crucial to ensure financial resources are made available to fund the new government’s priority economic and development policies, after the 17th April National General Elections.
(GCU/SOLSTAR)
