Solomon Islands and ADB
ADB supports Solomon Islands’ efforts to stimulate its economy with a focus on energy, urban development, transport, public sector management, and social infrastructure.
Figures are based on the latest edition of ADB's Asian Development Outlook, which analyzes economic and development issues in Asia and the Pacific. This includes forecasting the inflation and gross domestic product growth rates of economies throughout the region.
The latest available economic data for Solomon Islands compared to countries in the Pacific.
With persistent budget deficits and rising public debt, fiscal discipline must be a priority for the incoming government. After 5 consecutive years of deficits and a series of events with significant economic and fiscal impacts—the pandemic, civil unrest in November 2021, and the 2023 Pacific Games—the government must focus on restoring fiscal discipline. Cash reserves were significantly drawn down in 2023, and some invoices for the Pacific Games remained outstanding in the first quarter of 2024.
Introducing carefully designed fiscal anchors could guide fiscal policy and the budget cycle and help achieve fiscal sustainability. The government has already adopted some important measures to maintain fiscal discipline. These include debt limits and the Public Financial Management Act 2013, which prohibits the government from borrowing to fund recurrent expenditure when there is a budget deficit. While the government aims to hold cash reserves sufficient to cover at least 2 months of spending, it has proven a challenging target. Examples of fiscal anchors include a ceiling on wages as a portion of total expenditure or a limit on the budget deficit. In 2018, the IMF proposed a budget deficit limit of 1.5% of GDP, but this proposal has not progressed. Fiscal anchors would complement ongoing government efforts to diversify revenue and mobilize domestic resources, including extensive tax reform.
Restoring fiscal sustainability must be balanced with continued investment in development priorities. At times of fiscal deficit, the development budget becomes most at risk, as it funds initiatives beyond maintenance of essential services such as longer-term investments in health and education. The 2024 budget shows expenditure restraint, but the revenue trend is weak. With the focus on maintaining essential services, investment in key development priorities may suffer. Balancing these priorities will continue to be a challenge for the government in the medium-term.
The Fact Sheets summarize ADB's partnerships with member economies, providing key facts and figures and an overview of activities and future directions.
The Asian Development Outlook analyzes economic and development issues in developing countries in Asia.
The Key Indicators for Asia and the Pacific publication presents data regarding the economic, financial, social, and environmental situations in a broad range of countries across the region.
The Basic Statistics brochure presents data on selected social, economic, and SDG indicators such as population, poverty, annual growth rate of gross domestic product, inflation, and government finance for economies in Asia and the Pacific.