Coronavirus Likely to Cause Negative Impact on the Solomon Islands Economy

0
1016
Prime Minister Hon. Manasseh Sogavare.

BY ALEX DADAMU

THE Government is currently Prioritising Expenditure and all permanent secretaries are now reviewing and re-prioritizing their respective ministry budgets in anticipation of budget pressures due to the Corona Virus.

Prime Minister Hon. Manasseh Sogavare in his address to the nation reveal these to update the public about the government’s ongoing work to protect Solomon Islands from the coronavirus.

According to PM Hon. Sogavare, among a few other additional measures the Government taking will start scaling down non-essential government services.

“Non-essential government services will be scaled down following an assessment by Permanent Secretaries, and in the case of Honiara City Council and Guadalcanal Province, the City Clerk and the Provincial Secretary of Guadalcanal Province respectively.

“In relation to Sustaining Economic Activity and Growth – The government is currently analyzing appropriate ‘economic stimulus’ interventions to ensure the country’s economic engine continues to operate during the corona-virus-driven down-turn in economic activity.

Meanwhile according to the Central Bank of Solomon Islands (CBSI’s) updated report regarding the Corona Virus/COVID 19 impact on the national economy – the virus will likely have a considerable negative impact on the Solomon Islands economy.

“The spread and considerable disruption of this epidemic will be worsened by the increasingly intertwined trade and investment relationships between China and its neighbors in the Asia Pacific region. Being a small open economy, the Solomon Islands will likely be adversely affected through the trade channel and thereafter the economy and even fiscal operations.

“Imports of vital goods could also be affected. This is due to the fact that the country’s key trading partners that account for 40% of total imports are at the centre of the outbreak; China, Hong Kong, Korea, Singapore, and Japan. This would disrupt the supply chain of materials for consumption, manufacturing, and investment in the country.

“Due to the impact of the virus on the primary, secondary and tertiary sectors, the real GDP outlook for 2020 has been projected to decline by 60 basis points to 2.0%. This decline is likely to emanate from a slowdown in activities associated with forestry, tourism, and transport-related sectors,” the CBSI update report stated.

In the meantime, Prime Minister Hon. Manasseh Sogavare assured the nation that Effective today Friday 20 March, the Ministry of Health and Medical Services and the Government Communication Unit will provide daily updates on the Corona Virus situation in the country on electronic, print and broadcast media.