FINANCE Minister Harry Kuma says the ongoing threats by the COVID-19 would have possible effects on the country’s economy in the coming months.
Kuma said according to the International Monitory Fund (IMF) regional assessment, logging, being one of the major exports for revenue has slowed down from February to April and is likely to reduce further into July 2020.
He said those industries that are highly dependent on demand from Asia, in particular, China which has a strong declined in its economic activities in the first quarter of this year has worsened and slowed down in an already weak logging sector.
“Fisheries export mostly tuna exported to Italy also indicated a declining trend from the end of the first quarter and onwards.
“Prices are likely to fall and will severely affect the operation of Soltuna and employment of men, women, and girls in Noro,” he added.
He said with regards to the current travel restrictions, the tourism industry is likely to continue to lessen its specialist and employees to be laid off in the coming months.
“Furthermore, the restrain measures against COVID-19 is also likely to dampen the domestic consumption and delay donor’s supported infrastructure support such as Tina Hydro and the 2020 Pacific Games stadiums,” he said.
Kuma said oil price is likely to drop significantly in 2020 and as an oil consumer the Solomon Islands will benefit from lower fuel prices and lower import fuel bills.
However, he said the downside is that government revenue will be affected.
“Despite these backdrops and challenges, we are not yet on our knees and I wish to encourage businesses to keep going and rural populous to continue flap and farm the land,” he said.
He then assured that the government is determined and mobilise its domestic and external resources to prepare the country limiting financial and economic fallout of COVID-19 from the domestic economy.
The Central Bank of Solomon Islands (CBSI) also warned the economy is likely to go into recession in the second quarter of the year in light of the health pandemic and its impact on the global economy.
By IAN M.KAUKUI