19 Apr 2008

Tough year ahead for Solomon Islands says Central Bank

10:33 am on 19 April 2008

The Central Bank of Solomon Islands has warned 2008 is going to be tough and challenging, with the continuing increase in price of goods.

The paper, Solomon Star, says the warning came in the bank's Monetary Policy Stance, issued this week.

The Bank's Governor, Rick Hou, said international trend in commodity prices are bringing these challenges and difficulties.

Mr Hou said the price of oil, rice and wheat increased dramatically in 2007 and in particular during the first few months of 2008.

He said this has a negative impact on developing countries around the world and Solomon Islands is affected.

Mr Hou said developments in financial systems globally now point to significant slow down in economic growth, especially in the United States and other countries important to Solomon Islands.

Meanwhile, the bank's Monetary Policy Stance report said Gross Domestic Product or GDP is expected to fall by an estimated 6 per cent this year.