Industry (mostly mining, manufacturing, and construction) and
services (mostly trade, transport, and communications) drove growth in
2012. Gold production from the Gold Ridge mine ramped up, and exp...
were 2.4 times higher in 2012 than in 2011. Solomon Islands’ hosting of
the Festival of Pacific Arts and higher foreign direct investment helped
fuel growth outside of mining.
After a current account deficit in 2011 equivalent to 8% of GDP,
the deficit for 2012 is estimated at 6% of GDP, as higher grants from
development partners offset declines in export revenues (Figure 3.34.3).
The country has seen a significant rise in its foreign reserves, bolstered
by large inflows of grants and foreign direct investment. Higher fishing
license revenues were also a significant source of foreign currency inflows
in 2012. Foreign exchange reserves equaled 10.4 months of imports in
December 2012, up from 8.9 months in December 2011.
Inflation declined from 7.4% in 2011 to 5.9% in 2012 because of slower
economic growth, the revaluation of the domestic currency, and the
Central Bank of Solomon Islands mopping up liquidity (Figure 3.34.4).
In October 2012, the central bank replaced the Solomon Islands dollar
peg to the US dollar with a peg to a basket of currencies. This was to
enable the Solomon Islands dollar to respond more flexibly to market
Sources : Central Bank of Solomon Islands; ADB estimates.The Monthly Economic Bulletins reports on the monetary aggregates and other macroeconomic indicators relevant to Solomon Islands on a monthly basis.
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