The World Bank has issued the warning amid financial concerns surrounding the Solomon Islands, a country set to stage the Pacific Games for the first time next year.

Several foreign countries have already stepped in to support Solomon Islands efforts to host the multi-sport event, with significant support coming from China and Australia in particular.

However, the nation’s economic situation is continuing to look bleak with fears that public debt could reach 35 per cent of gross domestic product by 2026 unless action is taken.

According to a report by Reuters, the World Bank has urged the Solomon Islands to make changes to its tax system and ensure public spending is more effective to avoid plunging deeper into the financial mire.

"Without reform, Solomon Islands’ debt may become unsustainable," the World Bank said.

The guidance from the World Bank was welcomed by McKinnie Detana, undersecretary for the Minister of Finance and Trade in the Solomon Islands.

"We know we can expect a decline in logging revenues and identifying ways to diversify our country's income is a key focus of this Government," said Dentana.

The Solomon Islands is set to stage the Pacific Games for the first time next year but is facing financial challenges.

Prime Minister Manasseh Sogavare has had his term extended beyond the constitutional limit of four years after arguing that the country cannot afford to hold the Pacific Games and a general election in the same year.

Critics argue it is a breach of citizens' democratic rights and the constitution.

Australia had offered to fund elections, but Sogavare dismissed this as an attempt at interference.

Australia has donated AUD17 million (£10 million/$12.1 million/€11.8 million) to support the staging of the Pacific Games.

The funding is expected to aid visiting athletes' accommodation, sporting equipment and the construction of a temporary venue for open-water sports disciplines.

China has played a prominent role in supporting the Solomon Islands' preparations too.

Initially, Taiwan was given permission to build facilities for the Games, but allegiances were switched and China then became the largest supporter of the event.

Chinese state companies are building venues including the Athletes' Village and the new National Stadium, funded by Chinese aid.

Indonesia funded and built the Friendship Hall, a multi-purpose indoor venue, while there have also been suggestions that Qatar could provide support following a meeting of the countries’ Foreign Ministers last month.

The 2023 Pacific Games is due to take place between November 19 and December 2, following a four-month delay blamed on COVID-19.