“The domestic economy is continuing to slow down as a result of the impacts of covid-19,” says Prime Minister Manasseh Sogavare in his weekly national address Monday this week.
Key monthly economic indicators continue to show subdued performance indicating the continuing nature of the COVID-19 shock.
The Solomon Islands activity index also shows that business activities are well below the 2019 levels, as wholesale and retail trade, manufacturing, and other business activities continue to subdue making the outlook still very uncertain.
Compounding some of the clear impacts of COVID-19 on industries like tourism, the economy also experienced other major impacts in other sectors like fisheries, where fish catch is only around 55 per cent of the volume of last year.
As previously reported, the June forecast for the domestic economy to contract by around negative 4.3 per cent in 2020 still remain.
Prime Minister Sogavare, however, warned that the COVID-19 landscape is changing daily and there remains potential for further downside risks.
“We need to continue to be mindful of the possible impacts of further ‘second waves’ of COVID-19 infections spreading across the globe and associated disruptions this would bring to our borders,” Sogavare said.
The Prime Minister further warned that Government revenue collections have been weaker than expected and forecasted to be lower than the 2020 original budget.
Because of these events, the Ministry of Finance and Treasury continues to strengthen their compliance activities and ensure prudent administration of any tax incentives as a priority for the months of August through to December 2020.
Other Government Ministries non-tax revenue initiatives are also reviewed and strengthened.
This Government through the Minister of Finance and Treasury will continue to be updated on this situation and on any further fallout of the economy should the country reach a stage when business activities and other services are temporary closed,
“With these backdrops however, the underlying commitment of my Government is to ensure that the health and well-being of each and every one you is safeguarded and to keep the economy afloat,” Sogavare said.