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IMF Country Report No. 17/112
SAMOA
2017 ARTICLE IV CONSULTATION—PRESS RELEASE; STAFF REPORT; AND STATEMENT BY THE EXECUTIVE DIRECTOR FOR SAMOA
May 2017
Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. In the context of the 2017 Article IV consultation with Samoa, the following documents have been released and are included in this package:
A Press Release summarizing the views of the Executive Board as expressed during its May 1, 2017 consideration of the staff report that concluded the Article IV consultation with Samoa.
The Staff Report prepared by a staff team of the IMF for the Executive Board’s consideration on May 1, 2017, following discussions that ended on February 17, 2017, with the officials of Samoa on economic developments and policies. Based on information available at the time of these discussions, the staff report was completed on April 13, 2017.
An Informational Annex prepared by the IMF staff.
A Debt Sustainability Analysis prepared by the staffs of the IMF and the International Development Association (IDA).
A Statement by the Executive Director for Samoa.
The IMF’s transparency policy allows for the deletion of market-sensitive information and premature disclosure of the authorities’ policy intentions in published staff reports and other documents.
Copies of this report are available to the public from
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Telephone: (202) 623-7430 • Fax: (202) 623-7201
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Price: $18.00 per printed copy
International Monetary Fund
Washington, D.C.
© 2017 International Monetary Fund
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SAMOA: STAFF REPORT FOR THE 2017 ARTICLE IV CONSULTATION
April 13, 201 7
Key Issues
Context. The Samoan economy is performing well: growth is strong while inflation remains subdued. Nevertheless, there are sizeable downside risks to the outlook. Samoa is vulnerable to natural disasters, which has led to elevated public debt and financial sector vulnerabilities, including from public financial institutions (PFIs). High levels of remittances expose Samoa to spillovers from the withdrawal of correspondent banking services.
Main Policy Recommendations
Policies should focus on reducing vulnerabilities and securing sustained growth, by continuing to rebuild buffers, increasing resilience to natural disasters, and implementing structural reforms. Priority actions:
Mitigate spillovers from the withdrawal of correspondent banking relationships by improving AML/CFT compliance, and consider the establishment of a Know Your Customer (KYC) utility to help prevent disruptions to remittances and lower their cost.
Reduce financial sector vulnerabilities through continued implementation of Financial Sector Assessment Program (FSAP) recommendations and reform of public financial institutions (PFIs), by re-orienting them towards their original development mandate and improving governance.
Ensure fiscal sustainability by maintaining expenditure control, broadening the tax base and improving compliance to increase revenues, and adhering to the medium-term debt strategy guidelines on borrowing terms.
Recalibrate both monetary and fiscal policy if the reserve position deteriorates.
Accelerate state-owned enterprises (SOE) privatization and reform, improve the business climate, upgrade skills, and facilitate access to finance for small and medium enterprises (SMEs).
Approved By
Odd Per Brekk and Bob Traa
Discussions were held in Apia February 8-17, 2017. The staff team comprised Niamh Sheridan (head-APD), Reshika Singh (RR-PIC), and Analisa Ribeiro Bala (SEC). Nancy Lelang (OED) joined the discussions. Nadine Dubost and Chau Ngoc Bao Nguyen assisted from HQ.
Contents
CONTEXT
RECENT DEVELOPMENTS, OUTLOOK AND RISKS
POLICY ISSUES
A. Policies to Address Spillovers from the Loss of Correspondent Banking Relationships
B. Macro-Financial Policies
C. Ensuring Fiscal Sustainability
D. Monetary and Exchange Rate Policy
E. Structural Policies for Sustained and Inclusive Growth
F. Other Issues
STAFF APPRAISAL
BOX
1. Implementing the Enhanced General Data Dissemination System (eGDDS)
FIGURES
1. Real Sector Developments
2. External Sector Developments
3. The Role of Remittances
4. Fiscal Sector Developments
5. Monetary and Financial Sector Developments
6. Financial Access
TABLES
1. Selected Economic and Financial Indicators, 2013/14-2021/22
2. Balance of Payments, 2013/14-2021/22
3. Financial Operations of the Central Government, 2013/14-2021/22
4. Monetary Developments, 2011/12-January 2017
5. Financial Soundness Indicators, 2013/14-September 2016
6. Status of Millennium Development Goals
7. Strategy for the Development of Samoa and Sustainable Development Goals
ANNEXES
I. Risk Assessment Matrix
II. Anti-Money Laundering and Counter-Terrorist Financing Measures
III. Implementation of Key FSAP Recommendations
IV. Public Financial Institutions
V. External Sector Assessment
VI. State-Owned Enterprises
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SAMOA
STAFF REPORT FOR THE 2017 ARTICLE IV CONSULTATION —INFORMATIONAL ANNEX
April 13, 2017
Prepared By
The Asia and Pacific Department (In Consultation with Other Departments)
Contents
FUND RELATIONS
RELATIONS WITH THE PACIFIC FINANCIAL TECHNICAL ASSISTANCE CENTRE
RELATIONS WITH THE WORLD BANK
RELATIONS WITH THE ASIAN DEVELOPMENT BANK
STATISTICAL ISSUES
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SAMOA
STAFF REPORT FOR THE 2017 ARTICLE IV CONSULTATION—DEBT SUSTAINABILITY ANALYSIS
April 13, 2017
Approved By
Odd Per Brekk (IMF), and John Panzer (IDA)
Prepared by the staffs of the International Monetary Fund (IMF) and the International Development Association (IDA)1
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Press Release No. 17/174
FOR IMMEDIATE RELEASE
May 15, 2017
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