The International Monetary Fund published an end-of-mission statement following staff discussions for the 2026 Article IV consultation with Solomon Islands, assessing recent performance and setting out near-term policy priorities amid spillovers from the conflict in the Middle East. Staff estimated 2025 growth at 3.5% driven by agriculture and gold production, and projected growth to slow to 2.7% in 2026 with inflation averaging 4.8%; the current account was estimated to have moved into surplus in 2025 for the first time since 2012 but to return to deficit in 2026 as import prices rise. Fiscal consolidation and rebuilding government cash balances were identified as urgent priorities, with the 2026 budget noted as progress due to the presentation of a medium-term fiscal framework but still needing realistic and fully financed budgeting to avoid disruptive budget freezes. If measures are introduced to mitigate the impact of the Middle East conflict, they should be targeted to the most vulnerable, strictly temporary, and closely coordinated with donors; further delays to introducing a value-added tax should be avoided alongside stronger tax enforcement and rationalisation of exemptions. For monetary and exchange rate policy, staff advised continued monitoring and adjustment of the stance as warranted, while avoiding ad-hoc exchange rate adjustments and adhering strictly to the fixed exchange rate regime anchored to a currency basket. The statement assessed the financial sector as broadly sound while calling for expedited legislation to upgrade governance and regulatory frameworks for financial institutions and to establish a robust anti-money laundering and combating the financing of terrorism system, and for completion of outstanding National Payment System components. Staff also highlighted persistent delays in fiscal reporting and audits, ongoing governance weaknesses including in extractive-sector legislation and anti-corruption strategy implementation, climate-related long-term pressures on debt that strengthen the case for adaptation, and the need to improve key statistics. IMF staff will prepare a report for the IMF Executive Board’s discussion and decision, subject to management approval.
International Monetary Fund 2026-03-19
International Monetary Fund completes Solomon Islands Article IV mission projecting 2.7% growth in 2026 and urging fiscal deficit reduction
The IMF's end-of-mission statement for the 2026 Article IV consultation with Solomon Islands projects growth slowing to 2.7% and inflation averaging 4.8%. Urgent priorities include fiscal consolidation, realistic budgeting, enhanced tax enforcement, and maintaining the fixed exchange rate regime. The financial sector is sound, but legislative upgrades and improved governance are needed, alongside addressing fiscal reporting delays and climate-related debt pressures.