Solomon Islands - Joint World Bank-IMF Debt Sustainability Analysis

Overview & Synopsis

The 2026 Debt Sustainability Analysis (DSA) indicates that the risk of external debt distress and the overall risk of debt distress in the Solomon Islands remain low and moderate, respectively. These ratings, as well as debt coverage, are unchanged from those in the 2024 DSA (IMF Country Report No. 25/49).1 All external debt indicators remain below the relevant indicative thresholds under the baseline scenario and stress tests. The present value of the public debt to-GDP ratio remains below the indicative threshold under the baseline scenario but breaches the threshold under the commodity price shock and GDP growth scenarios. An alternative scenario that considers the impact of slow-moving, long-term shifts in climate suggests that these changes could have a meaningful cumulative impact on the public debt trajectory over the long run. Debt sustainability needs to be anchored by prudent fiscal policy to rebuild buffers, improved debt management capacity, and careful selection of donor-funded projects guided by a robust public investment management framework. Priority should be given to grant financing where available.