Solomon Islands : 2023 Article IV Consultation-Press Release; and Staff Report

This 2023 Article IV Consultation highlights that the economy is recovering from multiple shocks in the past three years, but the recovery is still fragile in the Solomon Islands. Near-term fiscal policy should focus on prudent execution of the 2023 budget, followed by rebuilding of the government's cash balance. Prudent management of public investment projects including their financing arrangements is an urgent priority. The current exchange rate regime remains appropriate, but a timely review of the currency basket is called for, given changes in trade patterns. Solomon Islands' external position in 2022 is assessed to be substantially weaker than the level consistent with medium-term fundamentals and desirable policies. Developing new growth drivers, including by enhancing natural resource wealth management, market regulation, and addressing governance weaknesses and corruption vulnerabilities, is an urgent priority. The IMF continues to support capacity development of the authorities in collaboration with development partners