At its meeting held on September 15th 2020, the Central Bank of Solomon Islands’ (CBSI) Has resolved to maintain its expansionary monetary policy for the next six months. With the world economy going into a recession, the Solomon Islands economy contracted in the year to June 2020 with broad falls in commodity production, tourism, construction and employment. Weak global demand and restrained domestic economic activities are expected to persist into the remaining part of the year and the country’s real GDP growth is projected to fall by -3.9% for 2020. The outlook for 2021 in line with the global trend, is more sanguine with growth picking up by 2.0% on the back of key pipeline construction projects and the recovery in other sectors such as agriculture, fisheries and services. It should be emphasized however that the 2021 forecast very much depends on the Covid-19 situation to stabilize. Alternatively, in the unfortunate situation where Covid-19 has spread in the country and lockdowns are implemented, growth could severely fall to -10.3% in 2020 and if extending into next year, a further drop by -5% in 2021. It is therefore imperative that the country maintain its status as Covid19-free.
CURRENT MONETARY POLICY STANCE
From this section of the site, you can download the complete Monetary Policy Statement, September 2020.