Total GDP as measured by purchasing power parity stood at $200 million USD (2002) with corresponding GDP/Capita at $1,700 USD. GDP growth is projected at 4.4 percent for 2005, 5 percent for 2006. Other growth figures include year 2004 at 4 percent, 2003 at 5.8 percent, years 2000-02 GDP growth contracted sharply. Inflation is estimated at 6.2 percent for 2005, year 2006 to slightly increase to 8.1 percent. Other inflation quotes have 2003 at 10.1 percent, year 2004 at 5.6 percent, inflation averaged 10 percent from 1995-2001. Overall balance of payments rebounded to a modest surplus in 2004. Foreign exchange reserves as of year-end 2004 at $52 million USD. External debt amounted to $160 million USD for 2004. Receiver: foreign grants.
CURRENCY: ISO Symbol ‘SBD’, Solomon Islands dollar. As of September 9, 2005, the currency exchange was valued at 7.53 SBD to the US-dollar (USD) and/or 9.3618 SBD to the EUR. The SBD is pegged to a basked of currencies.
CURRENCY HISTORY:the Solomon Islands dollar was introduced in 1977 in order to replace the then Australian dollar AUD which was the currency in use. The SBD was put in at a ratio of 1:1 to the AUD, the SBD has accordingly collapsed to a level of 5.4 SBD level approximately to the AUD. Historical quotes include year 1993 at 3.187 SBD to 1 USD, year 1994 at 3.29, year 1995 at 3.4, 1997 at 3.56, 1998 at 4.81, year 1999 at 4.83, June 5, 2000 at 5.089, year-end 2001 at 5.56 SBD to the USD, year 2002 at 6.748, October 2003 at 7.262, 2003 at 7.505 and year 2004 at 7.48.
CURRENCY FORECAST: regional assistance has brought back some stability after the domestic crisis during 2003 which experiencedpolitical conflict coupled with economic instability home to a fragile banking system. If stability can take hold, the Solomon Islands over the long term holds great potential as it is rich in natural resources such as in areas of mining, forestry, fishing, agricultural and the re-emergence of a vibrant tourism industry will provide for increased foreign exchange. One possible solution to reign in stability would include dollarizing the economy by again adopting the Australian dollar as national currency, this would provide for inflation & interest rate stability. Some Australian politicians have suggested a call for a Pacific Union in similar concept to the European Union with a shared currency, most likely the Australian currency. Whether or not this idea comes to fruition, but what is known is that Australia is certainly motivated for greater security and security cooperation for the region to prevent future terrorist attacks.
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UPDATED: September 9, 2005