Browse

You are looking at 1 - 10 of 10 items for :

  • Type: Journal Issue x
  • External debt x
Clear All Modify Search
International Monetary Fund. Asia and Pacific Dept
Samoa has shown resilience to past economic shocks, underpinned by the authorities’ strong commitment to support the economy and financial assistance provided by the international community. Samoa was among the first countries in the world to secure its border to protect its citizens from COVID-19. The authorities’ quick response to the measles outbreak and the global pandemic has identified the policy priorities well. The international community also responded swiftly, including the IMF disbursement under the Rapid Credit Facility (RCF) in April 2020 which helped unlock record budget support grants by the Asian Development Bank (ADB) and the World Bank (WB). The authorities strengthened the health care system and provided support to the private sector, with assistance targeted to vulnerable businesses and households to safeguard livelihoods.
International Monetary Fund. Asia and Pacific Dept
This 2019 Article IV Consultation discusses that Samoa faces several economic challenges but continues to show resilience and a high level of engagement with IMF. Growth is expected to rebound after reaching a five-year low. Price pressures driven by temporary factors are receding and inflation is projected to return to below the authorities’ target of 3 percent. Samoa remains vulnerable to natural disasters and correspondent banking relationship (CBR) pressures. The authorities have made progress in implementing measures to mitigate these risks. Policies should focus on tightening fiscal policy to ensure sustainability while achieving progress towards development goals; mitigating risks from CBR pressures; improving the monetary policy transmission mechanism; and implementing structural reforms to boost potential growth and make it more inclusive. It is important to tighten fiscal policy compared to the baseline. The report also advises to introduce focused structural reforms on building resilience to natural disasters, enhancing the business environment, encouraging female labor participation, and improving the trade facilitation framework.
International Monetary Fund. Asia and Pacific Dept
This 2018 Article IV Consultation highlights that Samoa’s economy has shown resilience and continues to perform well. Growth remained robust at 2.5 percent in 2016/17, driven by commerce, services and agriculture. Inflation picked up to 1.3 percent in 2016/17, compared with close to zero in the previous year, but remains well below the authorities’ target of 3 percent. The current account deficit narrowed to 2.3 percent, driven by temporary factors. The Samoan Tala appreciated against the United States dollar during 2016/17, although there was little change in the nominal and real effective exchange rates. Growth is projected to moderate to 1.8 percent in 2017/18 and then rebound in 2018/19, as two new businesses scale up operations at the old Yazaki plant and several infrastructure projects are completed.
Dongyeol Lee, Huan Zhang, and Chau Nguyen
Pacific island countries are highly vulnerable to various natural disasters which are destructive, unpredictable and occur frequently. The frequency and scale of these shocks heightens the importance of medium-term economic and fiscal planning to minimize the adverse impact of disasters on economic development. This paper identifies the intensity of natural disasters for each country in the Pacific based on the distribution of damage and population affected by disasters, and estimates the impact of disasters on economic growth and international trade using a panel regression. The results show that “severe” disasters have a significant and negative impact on economic growth and lead to a deterioration of the fiscal and trade balance. We also find that the negative impact on growth is stronger for more intense disasters. Going further this paper proposes a simple and consistent method to adjust IMF staff’s economic projections and debt sustainability analysis for disaster shocks for the Pacific islands. Better incorporating the economic impact of natural disasters in the medium- and long-term economic planning would help policy makers improve fiscal policy decisions and to be better adapted and prepared for natural disasters.
International Monetary Fund. Asia and Pacific Dept
This 2017 Article IV Consultation highlights Samoa’s continued good economic performance. Economic activity picked up during 2015/16 driven by tourism arrivals, lower fuel prices, and new fish processing facilities, further boosted by two major sporting events and infrastructure projects. Although the pace will moderate in 2017/18 and in 2018/19 with the closure of a large manufacturing plant, growth is expected to remain buoyant. The outlook is moderately positive though subject to downside risks related to Samoa’s vulnerability to natural disasters, elevated contingent liabilities, and withdrawal of correspondent banking relationships. Given Samoa’s reliance on workers’ remittances, the closure of bank accounts of money transfer operators heightens the risk of a disruption to remittance payments.
International Monetary Fund. Asia and Pacific Dept
KEY ISSUES Outlook and risks. Growth is recovering gradually from natural disasters and inflation remains subdued. The current account deficit is expected to narrow on lower international oil prices and a planned fiscal consolidation. The main external risk is the occurrence of another natural disaster in the presence of already high public debt and vulnerabilities in financial institutions. The main domestic risks center around a delay in rebuilding macroeconomic buffers, in particular through fiscal consolidation, reforms of public financial institutions and financial oversight. Improving financial resilience. A recent financial sector assessment program (FSAP) mission identified risks in some commercial banks and public financial institutions (PFIs). The role of PFIs needs to be refocused to reduce contingent liabilities for public finances and to support the development of private financial markets. Regulation and supervision of financial institutions needs to be improved to reduce the risk of an adverse feedback loop from banks and PFIs to the public finances in case of another external shock. Rebuilding macroeconomic buffers. A gradual fiscal consolidation is planned to reduce public debt to the target of 50 percent of GDP by 2020, mainly through improvements in revenue and a reduction in current expenditure. While there is no significant evidence of misalignment, and reserves are adequate by standard metrics, a stronger external position with higher reserves would provide greater resilience. Boosting growth. The authorities’ structural reform initiatives emphasize a revitalization of agriculture and food processing, tourism, and an enabling environment for business. Reforms to SOE governance are beginning to bear fruit, but the government should stay the course in planned privatizations and amendments to legislation to reduce the burden of state-owned enterprises (SOEs) on the public finances. Improvements in financial infrastructure will improve the flow and allocation of credit.
International Monetary Fund. Asia and Pacific Dept
Samoa was hit hard by a strong tropical cyclone, and the authorities are to be commended for their swift response to the resulting disaster. Economic growth this fiscal year is expected to be significantly lower than projected prior to the cyclone, but there are encouraging signs of early recovery. The need is to aim the fiscal strategy at securing sufficient resources while minimizing borrowing. With subdued inflationary pressures and the need to support the recovery, monetary policy should remain accommodative.
International Monetary Fund
Samoa has suffered severe social and economic shocks. The outlook is challenging and subject to considerable uncertainty. Because of the tsunami’s potentially severe impact on tourism, real GDP is likely to contract this financial year. The fiscal strategy to shoulder the rebuilding costs, minimize capacity risks, and ensure fiscal sustainability is appropriate. Prudent management of monetary policy and the basket peg will be critical. The Samoan economy will have to rely on the private sector for growth. Executive Directors welcome the commitment to structural reform.
International Monetary Fund
Samoa has achieved a major economic transformation over the last decade and a half. This 2007 Article IV Consultation highlights that real per capita GDP in Samoa has increased by more than 3 percent per year on average, and external public debt has fallen below 40 percent of GDP. The external position benefited from the rapid growth of remittances and tourism receipts. Executive Directors have congratulated the authorities on Samoa’s impressive growth performance and economic transformation over the past decade, with Samoa now set to graduate from least developed country status.
Mr. Douglas A. Scott and Mr. Christopher Browne

Abstract

This book, by Christopher Browne with Douglas A. Scott, reviews the economic progress that Fiji, Kiribati, Papua New Guinea, Solomon Islands, Tonga, Vanuatu, and Western Samoa have made since independence. An overview of the region examines development strategies, external economic relations, the role of the private sector, and the evolution of financial structures. Seven country studies describe the main characteristics of each economy, analyze performance over the past decade, and provide detailed statistics suitable for cross-country comparison.