CBSI launches 2016 Annual Report
THE Central Bank of Solomon Islands (CBSI) launched their 2016 annual report last week at the Heritage Park Hotel.
The event was attended by guests which include the Hon Prime Minister, Manasseh Sogavare, Opposition Leader, Hon Jeremiah Manele, senior government officials, diplomatic partners, CBSI board of directors, heads of State owned enterprises, CEOs of private sectors and commercial banks.
Representatives of NGOs, churches, media and women and youth groups also witnessed the launching.
CBSI governor, Mr Denton Rarawa took the honour of presenting the report.
In terms of the macroeconomic update and projections of the report he spoke about areas concerning; preliminary estimates, log production, labour market conditions, headline inflation, foreign reserves, the value of the Solomon dollar, money supply and liquidity levels.
Mr Rarawa said that from CBSI preliminary estimates, the country’s economy experienced a growth of 3.5 percent in 2016, an improvement from the 2.9 percent growth in 2015.
In addition, he said that the economic growth was triggered by forestry, agriculture along with support from the construction, manufacturing, transportation, communication and services sector.
Mr Rarawa mentioned that the construction sector benefited from public and private sector investments, particularly in large infrastructure and commercial buildings.
In the case of log production, he said that there was a 17 percent increase against a year ago to 2.292 million cubic metres.
Mr Rarawa explained that the outcome resulted from re-entry into previously logged out areas, clear felling for alternative land use, and an increase in plantation logs.
He also said that annual outputs for copra and palm oil also had positive outcomes with a 6 percent increase for copra and 12 percent for palm oil.
Furthermore, Mr Rarawa spoke about labour market conditions stating that the sector has slightly improved.
He expressed that by using SINPF membership as a proxy, the number of contributors rose by 1 percent resulting in 55,820 contributors.
He added that this is approximately 15 percent of the total labour force comprised of the working class people and those who are seeking employment between the ages of 15-64.
On this note, Mr Rarawa said that the country needs to create more jobs for the growing population.
As for headline inflation, he said that there was a drop from 2.9 percent in Dec to a negative 2.8 percent and that the downward trend was affiliated with declining food and energy prices.
Speaking of foreign reserves, he stated that the country’s foreign reserves is more than sufficient to accommodate the trading needs of the country as it is equivalent to around 10 months of imports of goods and services.
Mr Rarawa also said that the merchandise trade position of the country was positive in 2016 as a result of increased exports and falling import payments specifically, oil and machineries.
In relation, he said that although the overall current account position was still in deficit, it was altered by surpluses in the capital and financial accounts.
Mr Rarawa proceeds on to discuss the value of the Solomon dollar noting that the Solomon dollar slightly weakened in 2016 with the performance of the currency basket vis-à-vis movements in the global foreign markets.
He added that movements in the exchange rate have negatively impacted the CBSI in the last few years and with affirmation inclined that the bank is taking this matter seriously as they are monitoring further developments in this area with secured technical assistance to address this matter in the second half of this year.
Mr Rarawa moves on to talk about the status of money supply which he said expanded by 13% during the year to $4,742 million following growth in credit to the private sector with increases in net foreign assets and government spending.
Furthermore, he added that credit to the private sector increased by 12 percent year-on-year to $2,192 million in contrast to 16% growth in 2015.
Mr Rarawa said major borrowing sectors were construction, distribution, tourism, forestry and personal.
Lastly, he said that liquidity levels accumulated to a further $1,330 million an increase of 18 percent year-on-year which is more than sufficient to cater to the needs of the private sector.