Thursday, 15 May 2008 12:47 PM

Record Economic Growth for Solomon Islands

The Solomon Islands economy has performed exceedingly well in 2007 with a record estimated economic growth rate of 10.3%.

The Governor of Central Bank, Rick Hou, described the rate as the highest in two decades, and, driven largely by a spurt in logging providing a large part of this growth.

The CBSI 2007 annual report revealed that all sectors of the economy showed improved performance during the year with all major commodities registering growth. The report said Agriculture continued to perform well accounting for 18.5% of GDP. Mr. Hou said however, log production remained the single major driver which reached a new record in 2007.

The Governor said 2007 opened after four years of high growth that outstripped population growth with a very positive economic outlook. "Investor confidence and the high level of business activity experienced in recent years increased further both from foreign direct investment and domestic business activities. Solomon Islands economy therefore remained buoyant during the year."

While this may be welcoming news for many, economic pundits have pointed to the general weakness of the Solomon Islands economy that may become a huge problem in the near future.

"If we look at the numbers, it is quite clear that the growth is driven by the logging industry which, in my opinion, only shows one thing - the huge vulnerability of our economy," stated one pundit. "If we do not re-invest proceeds from the logging industry into other income generating industries, we face a very bleak future."