Economic recession looms, says CBSI - Solomon Star News

Economic recession looms, says CBSI

15 May 2020
Dr. Luke Forau.

THE outlook for the Solomon Islands economy this year is quite bleak, says the Governor of the Central Bank of Solomon Islands (CBSI) Dr. Luke Forau.

He said although Solomon Islands is still COVID-19 free, the impact of our preparedness against this pandemic on our economy, has taken a toll on the country’s projected growth for this year.

As a result for 2020, economic growth is projected to contract to around minus 5%. 

Given the uncertainty surrounding the COVID-19 pandemic, Forau said the country’s external and domestic environments will continue to be affected by the health containment measures and the weak consumer demand.

He pointed out that sectors that have already seen been affected and will continue to be affected significantly include tourism, transport, wholesale & retail, manufacturing, agriculture, and forestry.

He said the economy will go into recession during the second quarter of this year.

“Furthermore, the uncertainty surrounding the duration and magnitude of the COVID-19, let alone our continuous preparedness and containment measures, will continue to have a negative impact on the economy.

“However, over the medium term, growth is expected to return to an average rate of 3.5%, as key infrastructure and development projects are implemented,” he further stated.

In addition, Forau said the positive flow-on effects of the post-COVID-19 recovery and stimulus are expected to persist over the next couple of years.