12 Dec 2015

Solomons' GDP expected to continue to grow

2:56 pm on 12 December 2015

Moody's says it expects GDP in the Solomon Islands to grow by three-and-a-half percent next year, backed up by low government debt and strong donor support.

The ratings agency has given the country a B3 issuer rating with a stable outlook.

It says the country's growth performance has been robust, with average GDP growth of 5.4 percent in the last decade -- a strong performance compared to similar small, narrowly diversified economies.

At 11.9 percent of GDP in 2014, it says the government's debt burden is the lowest in the B-rated category in the Asia-Pacific.

However, the uncertain future of the logging industry, underdeveloped state institutions, and fragile and frequently changing governments present investment risks.

Moody's says the Solomon Islands is also vulnerable to potential aid cuts by donor countries.