World Bank report projects a 2.8 percent growth for Solomon Islands in 2024
By Ian Kaukui
Pacific island countries’ economies are expected to see slower growth in 2024 and 2025 driven by COVID-19 pandemic recovery fades and fiscal policies.
A statement from the World Bank semi- annual economic outlook report for the 11 Pacific islands countries shows despite the ongoing economic recovery, Pacific island countries still face formidable challenges.
Medium-term growth prospects have worsened, with output significantly below the pre-pandemic trend.
More than half of Pacific countries’ economies in the report are projected to see slower per capita growth than advanced economies, leading to widening income gaps and deteriorating prospects for poverty reduction.
For Solomon Islands, in 2023, after three consecutive years of negative growth, Solomon Islands’ economy returned to growth due to the reopening of borders, the resumption of major infrastructure projects, and investments in the 2023 Pacific Games.
“Solomon Islands as the second largest economy in the group is estimated to have reversed a 4.1 percent contraction in 2022 with 1.9 percent growth last year, driven by hosting the Pacific Games and substantial investments in energy and transport. It is also forecast to pick up by 2.8 percent in 2024.”
“An average of 3 percent is also expected for Solomon Islands Growth in 2024-2025 driven by large energy and transport infrastructure projects.”
The report stated inflation was eased in 2023 and is expected to further decline whilst large-scale investments for the 2023 Pacific Games and expenditure for the 2024 elections will add to budget pressures.
The report highlighted the three key solutions each pacific country should focus on should be on structural reforms for individual growth, reforming the public institutions and building human capital with right policies.
World Bank Honiara Office Senior Economist- Mr. Lodewijk Smets told local media yesterday the report highlighted the importance of investing in education which can support long-term development and improve medium- term growth prospects.
Mr. Smets emphasizes that well-educated people are the most important asset for the Pacific.
“Education is central to development in the Pacific and it is the key for individuals, Society and Economy.
“Improvements in education can be made through stronger teacher training and more cost-effective investments in infrastructure and resources,” he added.
The World Bank’s Pacific Economic Update provides a twice-yearly assessment of 11 Pacific island economies: Federated States of Micronesia (FSM), Fiji, Kiribati, Marshall Islands, Nauru, Palau, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu.
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