Solomon Islands economy expected to slow as global pressures rise, with World Bank warning weaker growth ahead.
The World Bank says Solomon Islands is expected to face slower economic growth as rising global fuel and shipping costs continue to affect the country’s economy.
According to the latest Pacific Economic Update: The Pacific Jobs Pathway, the near-term outlook for Solomon Islands and other Pacific countries has weakened due to ongoing global uncertainty and conflict in the Middle East, which has increased fuel, freight and insurance costs.
Speaking during a media briefing media briefing and launch of our latest Pacific Economic Update today, World Bank Senior Economist Ekaterine Vashakmadze said repeated global shocks are placing fresh pressure on Pacific economies and should now be treated as long-term structural challenges.
“Global uncertainty is creating fresh pressures, growth is weakening, and repeated shocks need to be understood as a structural challenge,” Ms Vashakmadze said.
“We also need crisis responses that protect long-term economic growth and resilience.”
World Bank Solomon Islands Country Economist Marko Kwaramba said Solomon Islands had experienced positive economic growth trends since 2021, supported by investment activity and improvements in inflation.
“Solomon Islands has done better in terms of growth since 2021, and investment has been one of the main drivers of that growth,” Mr Kwaramba said.
However, he said those gains are now being affected by the global energy crisis linked to tensions in the Middle East.
“That positive trajectory has been interrupted by the Middle East energy-induced crisis, and because of that we expect growth to decline to around 2.5 per cent,” he said.
Mr Kwaramba said one of the major concerns for Solomon Islands remains the pace of debt accumulation, despite continued investment activity supporting the economy.
“One of the outstanding issues is debt, and what is worrying is the pace of accumulation,” he said.
The concerns raised by the World Bank also reflect issues highlighted last month during the launch of the Central Bank of Solomon Islands Report 2025, themed “Fit for the Times: Prioritizing Inclusive and Resilient Growth”.
During the launch, Central Bank Governor Dr Luke Forau said the country must work together to strengthen the economy and improve resilience.
“We must work together to build a stronger, more inclusive, and resilient Solomon Islands,” Dr Forau said.
The Governor said the Solomon Islands economy grew by 3.6 per cent, but noted that growth was still not broad or fast enough to meet the needs of the population.
“While we are growing, it is not fast or broad enough to meet the needs of our people,” he said.
The World Bank said Solomon Islands, like many Pacific nations, remains vulnerable to external economic shocks because of its heavy reliance on imported goods and fuel.
As revealed in the Pacific Economic Update, economic growth across Pacific Island countries slowed to an estimated 3.2 per cent in 2024 and 2025, down from 6.5 per cent in 2023. Growth across the region is forecast to ease further to 2.8 per cent in 2026 before slightly recovering to 3.1 per cent in 2027.
