Finance Ministry provides update on country’s economic and fiscal performance

The Ministry of Finance and Treasury yesterday revealed the latest Solomon Islands economic data, based on the Ministry modelling.  It was revealed that Solomon Islands GDP grew by 3.5 percent in 2023, compared to the previous projection of 2.7 per cent.   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, 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 per cent. 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. 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.

On fiscal performance the Ministry of Finance and Treasury also confirmed that SIG finance is sound and secured during the first two months of this year.

Total actual revenue collections for the first 2 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 revenue collections for the first two months, however, was 12 per cent higher than expected. The positive collection in CED was driven by log revenue, import duties and excise duties.  Logging revenue collections in the first 2 month was much higher compared to the same periods in 2016 and 2017, due to the exports of 2023 stockpiled logs.

Revenue from the Inland Revenue Division was 7 per cent higher than what was estimated for collection in the first 2 month of 2024.  This is primarily due to higher than expected revenue collection from Company tax, Personal tax and withholding in the first two months in 2024.

Other Ministry revenue collection for the first 2 months of 2024 was around $19.02 million, lower than the 2024 budget estimates of $70.4 million.

In terms of SIG expenditure, total expenditures in the first 2 months amounted to $511.08 million. Big ticket expenditure items during the first 2 months included the followings:

• 2024 National General Election

• Education grants

• Health Grants

• SINU Grants

• Scholarship

• Terminal grants

• Riot support.

The Ministry also revealed that all Election related resourced are secured and ring-fenced.

The Ministry of Finance & Treasury also confirmed that it is committed to build its cash reserves and ensure the management of governments fiscal operations remains sound.  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 2024 National General Elections.

ENDS///

• GCU