Solomon Islands 2010 Economic Report

Economic and social progress in Solomon Islands has been limited since the country’s independence, and the recent global economic crisis has placed more pressure on the country’s economy. The resulting fiscal crunch and emerging balance-of-payments pressures demand a coordinated macroeconomic policy response, featuring recurrent expenditure restraint,prudent monetary policy, and public sector reform. Grant-funded infrastructure will also need to play a key role in supporting economic and employment growth. Finally, because the country is a high-cost, risky place in which to do business, the government must focus on removing constraints to private sector growth. This report outlines these recommendations for the medium- to long-term economic growth of Solomon Islands.