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Samoa: Staff Concluding Statement of the 2021 Article IV Mission HTML File

01/25/2021 | 12:30pm EST
Samoa: Staff Concluding Statement of the 2021 Article IV Mission

January 25, 2021

A Concluding Statement describes the preliminary findings of IMF staff at the end of an official staff visit (or 'mission'), in most cases to a member country. Missions are undertaken as part of regular (usually annual) consultations under Article IV of the IMF's Articles of Agreement, in the context of a request to use IMF resources (borrow from the IMF), as part of discussions of staff monitored programs, or as part of other staff monitoring of economic developments.

The authorities have consented to the publication of this statement. The views expressed in this statement are those of the IMF staff and do not necessarily represent the views of the IMF's Executive Board. Based on the preliminary findings of this mission, staff will prepare a report that, subject to management approval, will be presented to the IMF Executive Board for discussion and decision.

Washington, DC:COVID-19 has had devastating effects on Samoa's economy, adding to the economic shock experienced from the tragic outbreak of measles in late 2019. The authorities' swift actions and dedicated efforts, supported by the international community, moderated the impacts which have been of historical magnitude. Nonetheless, real GDP in FY2020:Q3 fell to the level last observed in 2014. The authorities face daunting tasks ahead to navigate the economy for an inclusive, durable recovery under unprecedented uncertainty. The mission encouraged continued efforts to entrench a durable economic recovery, and recommended the following policies.

  • Expansionary fiscal policy that extends some stimulus measures with better targeting for vulnerable households and businesses, with gradual withdrawal and medium-term consolidation which will slowly bring the public-debt to GDP ratio back to 50 percent.
  • Accommodative monetary policy stance with continuing efforts to improve the monetary transmission mechanism.
  • Implementation of the comprehensive financial sector reforms, along with continued implementation of the 2015 Financial Sector Assessment Program recommendations.
  • Enhancing AML/CFT supervision to upgrade compliance in high-risk institutions, guided by customer due diligence and suspicious transaction reporting obligations that are conducive to mitigating CBR pressures.
  • Structural reforms with priority on job creation and mobility, supported by promotion of financial inclusion with fintech applications, as well as promotion of agriculture, fishery, and MSMEs to leverage the PACER-Plus for exports. Improving the business environment and building resilience to natural disasters will support the private sector.
  • Further developing statistical capacity and interagency collaboration, facilitated by a legal framework, for information sharing that promote evidence-based policy making.
A. Recent Developments, Outlook, and Risks: Challenges still ahead

1. 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, including safeguarding human capital, providing support to the private sector, and maintaining macroeconomic stability. With support provided by the international community, the authorities enhanced the country's preparedness to handle the impact of COVID-19, as well as improving the quality and efficiency of the health care system. The policy response also targeted assistance to vulnerable businesses and households to ease the impact of the pandemic and safeguard livelihoods.

2. However, the prolonged effects of the global pandemic heightened the economic challenges, adversely impacting the wellbeing of many Samoans. The border closure and restrictions under the State of Emergency kept the pandemic at bay, protected the Samoan people, and avoided the collapse of the health care system. Nevertheless, a severe blow to the tourism sector and spillovers on other sectors resulted in a severe economic contraction. The 2020:Q3 GDP, released in late December, recorded a fourth consecutive quarterly decline, and the total economic fallout of the two health shocks has reached 16¼ percent since Samoa hosted the Pacific Games in July 2019. Consequently, the recession pushed the economy back to the level of real GDP last observed in 2014, leaving deep scars.

3. Based on the preliminary data, staff projects real GDP to contract by around -8.5 percent in FY2021, following −3.2 percent in FY2020. While remittance inflows proved resilient and helped moderate adverse impacts of the crisis, weak domestic demand dictates private sector developments under the State of Emergency. Most social restrictions were lifted in December with the aim of stimulating domestic economic activities, but floods around the time of the festive season dealt yet another blow to the economy, costing (based on the authorities' estimate) at least 1½ percent of GDP. Against this background, consumer prices continue to decline, and headline inflation reached -5 percent (y/y) on average for the past twelve months through December. Declines in global commodity prices and domestic utilities (resulting from the fiscal stimulus), as well as increased agricultural production, underpin staff's inflation projection of -2.5 percent for FY2021.

4. The economy is projected to bottom in the latter half of FY2021, and an economic recovery is expected to begin in FY2022. Given the scarring effects of the pandemic, it will take several years for the economy to reach the pre-COVID level of real GDP. The pace of recovery will depend on a number of factors, of which the most critical are procurement and rollout of effective COVID-19 vaccines, timing of the border reopening, and resumption of tourism and its related sectors. Implementation of effective macroeconomic policies facilitate job creation and mobility, help heal the scarring effects, and increase durability of the economic recovery over the medium term.

5.Downside risks to the outlook remain. Under execution and premature withdrawal of economic stimulus measures could impede the pace and durability of the economic recovery and strain financial stability. The recovery path depends on the procurement and rollout of the effective vaccines and resumption of private sector activities. Premature opening of the border poses a threat of a domestic outbreak of COVID-19. High vulnerability to natural disasters continues to threaten the economy, potentially causing widespread damage. Delays in rollout of a Know-Your-Customer (KYC) utility to address customer identification and other AML/CFT concerns could potentially hurt perceptions on remittance flows, raise pressures on correspondent banking relationships (CBRs), and adversely impact the economy as well as central bank's reserve coverage. Global trade tensions remain headwinds, but regional trade agreements may yield a favorable outcome over the medium term.

B. fiscal policy: promoting Inclusive economic recovery

6. The authorities' swift actions helped orchestrate mobilization of multi-pillared financial assistance to assemble fiscal stimulus packages. The authorities introduced phase I and II stimulus packages in a timely manner, with financial support from the international community. The phase-I stimulus (3.1 percent of GDP) in FY2020 entailed support to affected businesses and households, while safeguarding human capital through health, education, food security, and essential public services. The phase-II stimulus package (4.2 percent of GDP) in the FY2021 extended some of the phase-I stimulus measures and introduced new ones for vulnerable households and businesses outside the reach of the phase I stimulus, including through the provision of community-based primary health care services and unemployment subsidies. Annual dividend payouts by the National Provident Fund (1.5 percent of GDP) were also part of the phase II stimulus package. Several state-owned enterprises (SOEs) helped the government execute the stimulus.

7. Fiscal outturns in FY2020 show that the overall balance recorded two-consecutive years of surplus, reaching around 6 percent of GDP. As a result, the public debt-to-GDP ratio continued to decline to 46¾ percent of GDP. Grants from the international community provided timely support, and alleviated pressures on government's cashflow. The surplus in FY2020 was driven by a favorable outturn in tax revenue collection owing to improved tax compliance in advance of the phased rollout of the Tax Invoicing Management System (TIMS). More importantly, under execution of the capital budget largely contributed, since development projects contain a large share of import components (both goods and services) and the prolonged border closure and severe weather adversely impacted project execution.

8. The authorities need to further accommodate their expansionary fiscal policy for an inclusive recovery. The staff projects the overall fiscal balance in FY2021 to reach around -3.0 percent of GDP, if the operating budget inclusive of the phase-II stimulus and the plan to invoke the G20 Debt Services Suspension Initiative (DSSI) are fully executed, along with a reformulated capital expenditure budget that takes account of its execution capacity. Given the severe economic fallout of the pandemic, the staff recommends extending stimulus measures until end-FY2024, harnessed by a commitment to stronger medium-term fiscal consolidation that helps limit scaring effects of the pandemic, and promotes inclusive, durable recovery, while ensuring debt sustainability.

9. The strategy of further fiscal accommodation (staff's 'alternative scenario') entails extension of temporary measures with better targeting and gradual withdrawal. The strategy would raise the deficit in FY2021-FY2024 relative to staff's baseline projection, but the impact on the public debt trajectory would be partly offset through the stimulative impact on output with efforts to mobilize revenue over the medium term, including through:

  • Extending social protection programs, safety nets, and budget support to the SOEs which provide stimulus measures in the near term, and withdrawing them gradually: Further extension of the financial assistance measures that are due to expire by end-FY2021 will help safeguard wellbeing, limit scarring effects, and address setbacks on SDGs with a particular focus on poverty and income inequality. The measures can be gradually withdrawn by end-FY2024 when the economy is projected to reach the pre-COVID level.
  • Protecting health, with effective rollout of vaccination: The authorities have recently arranged financial support from the Asia Development Bank (ADB) and the World Bank (WB) to secure vaccine procurement and distribution through UNICEF. The authorities need to clearly communicate their plan and progress with its execution to help align public expectations.
  • Pushing through revenue mobilization over the medium term: A holistic approach will be needed by improving tax compliance, increasing excises (e.g., alcohol and tobacco), and broadening the VAT tax base in light of a gradual revenue loss expected from the PACER-Plus agreement. Introducing a time-bound (e.g., 5 years) to the loss carry forward period would also limit forgone revenues over the medium term. Fully executing the rollout of the TIMS, with a measured approach for small retailers, and an establishment of a large taxpayer office can further improve tax compliance and mobilize revenues.
  • Adopting international standards and best practices: The authorities need to continue their engagement with the European Union (EU) with regard to the EU list of non-cooperative tax jurisdictions, and make swift progress with ongoing tax governance efforts, with a view to being removed from the EU list in 2021.
  • Gaining expenditure efficiency with sound governance: Since the national digital ID system will take three years to complete, targeting of fiscal support can be achieved in a concerted effort with the existing NGOs and other organizations on the ground that have been providing social welfare to vulnerable households, while drawing attention to sound governance and transparency.
  • Reprioritizing budget expenditure towards job creation and mobility: Prolonged adverse effects on the tourism-related sectors adversely impacts local employment opportunities in formal and informal sectors alike. Facilitating structural reforms with enabling fiscal policies (e.g., employment subsidies) can promote resource allocation and job creation needed in the strategically-important growth sectors for diversification, and address high unemployment among women and the youth. Measures to support reskilling and upskilling of workers to facilitate a recovery in the tourism sectors will be also needed when the border is reopened.
  • Implementing economically-viable CAPEX projects (enhancing resilience to climate change): The authorities need to maximize benefits of the development projects which can mobilize domestic resources, and promote private investment for job creation. Investing in climate-resilient infrastructure (including schools) remains a top priority. The strategy must set aside adequate budget for infrastructure maintenance over the medium term to maximize its service life and durability.

10. The authorities need to fully execute stimulus measures. The mission welcomes the authorities' efforts to strengthen public financial management (PFM) with the new Finance Sector Plan 2020/21-2024/25. The mission stresses the importance of:

  • Improving budget reliability, predictability, and execution controls , with focus on strengthening cash management and improving capital budget execution. A monthly or quarterly review of each project is needed for better monitoring, including an evaluation of physical and financial execution, in order to ascertain the rate of execution of development projects at the national level. Timely assessment of implementation delays needs to be addressed with corrective actions, and incorporated appropriately in the budget to improve its predictability and execution controls.
  • Seeking to improve procurement efficiency based on the new Procurement Manual. Greater attention is needed on governance and transparency over procurement contracts, with the ongoing practice of reporting beneficial ownership information and ex-post audit.
  • Strengthening to monitor SOE's performance. Contingent liabilities from SOEs and SOE fiscal risks require careful monitoring and analysis, as well as timely information gathering and effective coordination between the Ministry of Finance and the Ministry of Public Enterprises. The mission acknowledges the authorities' continuing efforts to improve monitoring and reporting of SOEs debt statistics. The authorities need to provide adequate budget support to SOEs (in particular, those providing direct assistance to households and businesses) to help manage their cashflows and reduce financial risks. Such assistance must be well balanced with the overall objective of enhancing governance and transparency, as well as productivity over the medium term.

11. The authorities need to secure adequate budget financing over the medium term, while safeguarding debt sustainability. In staff's assessment, Samoa's debt is sustainable but remains at high risk of distress, given the country's high vulnerability to natural disasters. Staff projects a sizable fiscal deficit to persist over the medium term, but decline to the authorities' deficit target of 2 percent of GDP by FY2026. The public-debt-to-GDP ratio is projected to plateau at around 57 percent under the baseline, with the deficit to be fully financed by concessional loans. The fiscal policies under the staff's alternative scenario would raise the deficit in FY2022-FY2024 but bring the public debt trajectory downward over the medium term. With the value of outstanding government deposits amounting to around 13 percent of GDP at end-FY2020, the authorities need to formulate the size and the pace of deposit drawdown to partly offset the use of concessional loans, while maintaining an adequate buffer needed for self-insurance against losses from natural disasters. Efforts to mobilize budget support grants to fill in the financing gap will bring the public debt trajectory closer to the target of 50 percent of GDP by the end of the medium term.

C. Improving Monetary Policy Transmission and the External Position

12. Monetary policy is appropriately accommodative, but credit intermediation remains constrained by weak monetary transmission. The policy rate has remained at 15 basis points, signaling appropriate support in the context of low inflation. Following the onset of the global pandemic, the Central Bank of Samoa (CBS) has set up a Standby Credit Facility for commercial banks to obtain liquidity as needed. The CBS has ceased open market operations to allow the banks to use their available liquidity to meet private-sector credit demand. As of end-November 2020, domestic liquidity in the banking system remained ample, with excess reserves reaching 16 percent of GDP. However, the liquidity position varies across the banks. Given price deflation, CPI-adjusted deposit and lending rates both reached a 7-year high amid heightened credit risks. Private sector credit growth continued to decline, reaching 1.5 percent (y/y) in November 2020 (the lowest since 2013).

13. The authorities need to continue with a holistic approach to improve the transmission mechanism. Structural issues in credit markets restrain credit provision by commercial banks while public financial institutions (PFIs) cater to niche markets with policy lending under implicit government guarantees. The mission welcomes the CBS's review, in consultation with the commercial banks, of the linkage between the banks and the PFIs/SOEs. Some banks had been paying much higher deposit rates to wholesale depositors (including PFIs/SOEs) than retail counterparts. The implementation by the CBS to cap deposit interest rates at 3 percent for 12 months, starting December 2020, was intended to address market distortions and reduce volatility in the wholesale deposit rate that pushed up banks' cost of funds. Whether it becomes conducive to cutting lending rates rests on a commercial decision by the banks. To improve monetary transmission and help facilitate credit intermediation, the CBS would need to implement its financial sector master plan in a measured approach, including:

  • Continuing to implement financial inclusion reforms , including through re-establishing a credit bureau to facilitate credit risk assessments of individuals and businesses, and enhancing bankruptcy laws and consumer protection, while improving financial literacy. The mission stresses the importance of eliminating any regulatory gaps in the financial system that may hamper effective operations of the bureau and minimize potential leakage in coverage when it is established. Adequate budget needs to be mobilized to help finance appropriate technology and resources for sufficient capacity.
  • Strengthening regulatory and supervisory frameworks to better monitor activities of credit unions, microlenders, and other informal lending arrangements. The mission welcomes the authorities' decision to bring other financial institutions under the CBS oversight, and reiterate the FSAP recommendations to adequate supervisory capacity.
  • Mitigating credit risks to natural disasters by making disaster risk insurance available to farmers or developing financial products that would address the risks.

14. The authorities need to build external buffers to an adequate level to address vulnerabilities to climate change and external shocks. The support by the international community helped build foreign exchange reserves at the CBS to a comfortable level during the height of the pandemic, which contributed to external stability. At end November, reserves cover about 8 months of prospective imports, and remain adequate for credit-constrained economies. But they are expected to decline closer to the lower bound of the desirable range (4.1 to 6.4 months of prospective imports) over the medium term once Samoa's vulnerability to natural disasters is considered. The mission advises the authorities to build reserve buffers to an adequate medium-term import cover of at least 5 months, including through donor support. Given continued external volatility, the mission welcomes the authorities' commitment to more frequent reviews to ensure Samoa's pegged exchange rate continues to serve as an appropriate nominal anchor in the context of weak monetary policy transmission.

D. Developing a Sound Financial Sector and maintaining stability

15. Commercial banks hold capital well in excess of minimum requirements but need to maintain sound liquidity positions for financial stability . Financial soundness indicators through 2020 Q3 show that the banking sector's overall health has held up. The loan-to-deposit ratio continued to fall with slowdowns in credit growth. While the NPL ratio continued to decline overall, concerns of deteriorating loan quality prompted the banks to set aside appropriately additional provisions. Separately, the concentration of banks' exposure to commercial real estate sector has increased recently against limited supplies of available customary land for commercial use. Declines in profitability during 2019:Q4 and 2020:Q3 are consistent with the economic fallout of the shocks. However, the experience among the banks varied, and it depends on their profit base, exposure to the tourism sector, and the type of borrowers. Careful monitoring and assessment of the banks cash flows, liquidity positions, and balance sheets are needed to maintain financial stability.

16. The mission encouraged the authorities to formulate a coherent framework for PFIs' performance and governance. The role and governance of PFIs should be reformulated with the aim of achieving the specific socio-economic objectives they have been set up for, which will reduce market distortions, and prevent crowding-out of commercial bank activities. Subsidized lending schemes with government guarantees need to be well formulated and targeted with a commercial focus, and evaluated based on a sound guiding principle to contain potential fiscal risks of contingent liabilities. PFIs should refrain from policy lending, unless budgetary funding is in place. To ensure debt sustainability, the policy can aim to improve the balance sheet of the Development Bank of Samoa (DBS), catering important services to the development of MSMEs for inclusive growth. Recent efforts by the DBS to write-off existing NPLs are a step in the right direction, and need to continue in order to manage fiscal risk from the DBS. Improving accounting and disclosure practices is also needed to enhance transparency and governance.

17. Financial sector policies should continue to focus on completing the implementation of the 2015 FSAP recommendations. The mission acknowledges the efforts made by the CBS which has made continuing progress in a number of areas, including upgrading prudential regulations and the supervisory framework to meet the changing financial sector landscape, conducting onsite inspections of insurance companies, and drafting legislation to bring other financial institutions under the CBS oversight. Moving forward, the priorities include closely monitoring activities by financial institutions for financial stability, building further capacity to conduct asset reviews and sensitivity analyses, upgrading the resolution framework that entails correction actions, further enhancing regulatory and supervisory capacity to prepare for the changing ecosystem, and continuing with efforts to enhance risk-based AML/CFT supervision (see below).

18. Financial inclusion reforms could leverage fintech solutions. The mission stressed that implementing the authorities' financial inclusion strategy (NFIS) is important to reduce inequality (particularly pertaining to gender inequality), and increase opportunities for all Samoans. The authorities should continue supporting private sector initiatives for mobile money and payment systems.

E. Mitigating Correspondent-Banking-Relationship (CBR) Pressures

19. Correspondent banking relationship (CBR) pressures remain a concern, which need to be mitigated with ongoing reforms towards enhanced AML/CFT effectiveness. Two domestic banks have received notice of termination of their U.S. dollar CBR with a correspondent bank by end-March 2021. The CBS is monitoring the affected banks in identifying alternatives as well as the impact on financial and remittance flows. Consultants have been engaged by the CBS to take stock of the country's implementation of the Asia Pacific Group's recommendations in the 2015 Mutual Evaluation Report and update its national risk assessment. Enhancing AML/CFT supervision should contribute to upgrading compliance in higher risk institutions, namely banks, money transfer operators (MTOs), and trust and company service providers (TCSPs), including customer due diligence and suspicious transaction reporting obligations. Development of a national digital identification system should facilitate customer identification, especially for citizens receiving remittances. Ensuring that TCSPs are verifying the accuracy of beneficial ownership information and that authorities are facilitating international exchange of such information will contribute to enhancing transparency of international business companies established in Samoa. The mission encourages that the authorities continue to engage other Pacific island countries and international partners in developing regional solutions to address CBR pressures, including a regional digital Know-Your-Customer facility.

F. Boosting Potential Growth with Further Structural Reforms

20. Structural issues predating the pandemic require urgent attention, and sectoral strategies need to be realigned to the post pandemic. COVID-related job losses are concentrated in the tourism and supporting sectors that employ a large fraction of women and youths. Some Samoans under seasonal employment programs (SEPs) abroad have also returned home. Job creation and mobilization must be addressed to reduce high unemployment, underemployment, and those who are 'not in education, employment or training (NEET)' among the youth. Multifaceted structural reforms-well-aligned with key outcomes expected in each sector to achieve sustainable development goals (SDGs)-will help women and young generations acquire relevant job skills, fortify the recovery, and minimize scarring. Formulating reform priorities and sequencing, with particular attention to the tourism sector, is indispensable to fully execute the strategies. Focuses are:

  • Promoting agriculture, fishery, and MSMEs remains priority for inclusive growth as they constitute a significant proportion of employment in both formal and informal sectors, with a disproportionately high participation of women in MSMEs. The mission welcomes the authorities' efforts to update the MSMEs strategy with consideration given to the effects of the pandemic. Improving credit access and facilitating the provision of insurance to promote these sectors will lead to job creation in rural areas, and promote female labor force participation.
  • Boosting human capital by enhancing health capital, ensuring food security, promoting nutritious diet, improving access to and the quality of education including with use of technology, and linking education/training to match closely the skills needed for jobs.
  • Upskilling and reskilling of the labor force to facilitate job creation/mobility and promote economic diversification, with attention to non-tourism sectors. The authorities could facilitate skill/knowledge transfers by returned Samoans under the SEPs to give training to other Samoans who plan to join the workforce with potential employment in regional and global markets. Establishment of apprentice programs can help reduce skills mismatch and nurture industries. Training programs need to be offered to the tourism sector at a pace consistent with the sector's resumption.
  • Upgrading the business environment for export growth to take advantage of the PACER-Plus which came into effect in December 2020. The mission encourages the authorities to actively engage with the private sector for disseminating information, and continue making efforts to address key challenges of meeting regulations and standards under the PACER-Plus. Establishing the PACER Plus Implementation Unit within the Ministry of Foreign Affairs and Trade in 2021 is a welcome development to monitor the progress and direct necessary actions. Nevertheless, a comprehensive approach is needed to promote exports. Reviewing the existing tax regime for businesses, improving trade facilitation to reduce the cost by expediting customs clearance with effective use of Samoa Trade Information Portal, and promoting export diversification with support from foreign direct investment remain imperative. Developing a business-friendly investment platform could help enhancing the business environment and engagement with stakeholders, nurturing seeds of new opportunities for growth.
  • Upgrading and maintaining physical infrastructures to make them fully resilient to natural disasters for lasting serviceability, while mainstreaming climate resilience into all sector plans.
G. Continuing to build the statistical capacity

21. The mission encourages the authorities to continue building statistical capacity and interagency collaboration that facilitate evidence-based policy making. The COVID-19 crisis has increased the need for granular, relevant, and reliable data in a timely manner. International organizations have stepped in and helped the authorities gather necessary information during the pandemic, and analyze its impacts for Samoan households and businesses. Moving forward, the authorities need to make further investment in human capital and technology, promote comprehensive inter-agency collaboration, and enhance information sharing for the production of timely and quality statistics, supported by the legal framework. These efforts will help promote sound policy management and structural reforms to underpin inclusive, durable economic recovery and address SDGs. The authorities can also integrate their efforts into the establishment of national digital identification, which can go a long way towards improving efficiency of public administration, services delivery, and targeting of social protection programs. The enhanced statistical capacity will help monitor the progress , adjust the strategy if needed, and build a prosperous economy for all Samoan citizens.

H. Maintaining a High Level of Engagement

22. Samoa is addressing economic challenges and maintains a high level of engagement with the IMF. The Samoan people have steered economic challenges over the past decades and shown resilience, with support from their communities, their government, and the international community. It is the time again for the country to turn adversity into opportunity as the Government of Samoa continues to strive to make progress in implementing economic reforms. The government is highly engaged with the IMF and other development partners, and the IMF stands ready to support the government's reform efforts through policy advice and capacity development, especially in the areas of fiscal management and reform, monetary and exchange rate policy, financial sector supervision and regulation, and macroeconomic statistics.

*****

The IMF team would like to thank the Ministry of Finance, the Central Bank of Samoa, other ministries and government agencies, and private sector interlocutors for their open and constructive discussions.


Table 1. Samoa: Selected Economic and Financial Indicators, 2017/18 - 2025/26

Est.

Proj.

2017/18

2018/19

2019/20

2020/21

2021/22

2022/23

2023/24

2024/25

2025/26

(12-month percent change)

Output and inflation

Real GDP growth

-2.1

3.6

-3.2

-8.5

2.9

3.0

3.5

2.5

2.1

Nominal GDP

-0.1

5.8

-2.8

-10.6

5.6

5.1

5.9

5.2

4.8

Consumer price index (end of period)

5.8

-0.1

-3.3

3.1

1.9

2.4

2.4

2.6

2.6

Consumer price index (period average)

3.7

2.2

1.5

-2.5

2.7

2.1

2.4

2.6

2.6

(In percent of GDP)

Central government budget

Revenue and grants

32.1

35.7

38.5

37.2

32.2

33.8

35.3

35.7

35.8

Of which: grants

4.4

6.0

9.4

11.3

5.5

5.5

5.6

5.6

5.6

Expenditure

32.1

32.9

32.3

40.3

38.8

39.0

38.0

38.0

37.8

Of which: Expense

24.5

25.8

28.8

36.2

32.6

31.6

30.4

29.9

29.6

Of which: Net acquisition of non-financial assets

7.6

7.1

3.5

4.1

6.3

7.4

7.7

8.0

8.2

Gross operating balance

7.7

9.8

9.7

1.0

-0.4

2.2

5.0

5.8

6.2

Overall fiscal balance

0.1

2.7

6.2

-3.0

-6.7

-5.2

-2.7

-2.2

-2.0

Overall fiscal balance excl. grants

-4.3

-3.3

-3.2

-14.3

-12.2

-10.7

-8.3

-7.9

-7.6

(12-month percent change)

Macrofinancial variables

Broad money (M2)

16.5

9.9

-0.9

1.8

6.7

6.0

5.9

4.9

4.8

Net domestic assets

-2.8

2.1

-5.5

Private sector credit, Commercial banks

1.6

6.1

5.8

3.5

5.6

6.0

5.4

5.3

5.2

Total loan growth, Commercial banks

1.7

5.8

3.9

Total loan growth, Public financial institutions

6.0

17.2

9.0

(Ratio)

Total capital to risk-weighted exposures

27.3

27.5

27.5

Non-performing loans

4.3

3.9

3.9

(In millions of U.S. dollars)

Balance of payments

Current account balance

7.2

25.9

9.3

-46.0

-79.6

-53.3

-31.6

-17.5

-15.1

(In percent of GDP)

0.9

3.0

1.2

-6.2

-10.2

-6.5

-3.7

-1.9

-1.6

Merchandise exports, f.o.b. 1/

36.3

50.0

46.3

41.1

40.2

40.5

42.7

45.2

48.0

Merchandise imports, f.o.b.

328.9

349.4

316.3

288.3

299.1

325.5

352.1

388.7

423.8

Services (net)

158.4

179.8

113.9

-25.7

17.8

61.6

106.7

137.3

167.8

Income (net)

-29.7

-35.8

-23.5

-17.2

-15.1

-16.1

-17.6

-19.6

-23.1

Current transfers

171.1

181.3

188.9

244.0

176.5

186.3

188.7

208.3

216.0

External reserves and debt

Gross official reserves 2/

163.1

192.8

230.6

208.3

166.9

156.8

168.3

182.8

189.1

(In months of next year's imports of GNFS)

4.4

5.6

7.3

6.4

4.7

4.1

4.1

4.1

4.0

Public debt (in millions of tala) 3/

1,113.8

1,058.6

1,012.3

988.6

1,135.9

1,249.8

1,313.5

1,370.6

1,425.8

(In percent of GDP)

52.8

47.4

46.7

51.0

55.5

58.1

57.7

57.2

56.8

External debt (in percent of GDP)

51.9

46.8

46.3

50.7

55.3

58.0

57.6

57.1

56.8

Exchange rates

Market rate (tala/U.S. dollar, period average) 4/

2.52

2.62

2.67

Market rate (tala/U.S. dollar, end period) 4/

2.60

2.63

2.70

Nominal effective exchange rate (2010 = 100) 4/

106.3

109.1

109.3

Real effective exchange rate (2010 = 100) 4/

102.4

105.2

106.3

Memorandum items:

Nominal GDP (in millions of tala)

2,108

2,231

2,168

1,938

2,047

2,151

2,278

2,396

2,510

GDP per capita (U.S. dollars)

4,198

4,238

3,961

3,646

3,780

3,930

4,116

4,278

4,425

Sources: Data provided by the Samoan authorities; and IMF staff estimates and projections.

1/ Includes re-export of fuel after 2009/10.

2/ Includes the IMF disbursement of SDR16.2 million (100 percent of quota) under the Rapid Credit Facility (RCF) and external financial assistance by

multilateral and bilateral donors to support policies to address impacts of the global COVID-19 pandemic.

3/ Includes domestic and external public debt.

4/ IMF, Information Notice System.

IMF Communications Department MEDIA RELATIONS

PRESS OFFICER: Pemba Sherpa

Phone: +1 202 623-7100Email: MEDIA@IMF.org

@IMFSpokesperson

Disclaimer

IMF - International Monetary Fund published this content on 25 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 January 2021 17:25:02 UTC


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