{ "title": "IMF Executive Board Completes the 2021 Article IV Consultation with Samoa", "publication": "IMF News, March 19, 2021", "sourceUrl": "https://www.imf.org/en/news/articles/2021/03/19/pr2174-samoa-imf-executive-board-completes-the-2021-article-iv-consultation-with-samoa", "canonical": "https://www.imf.org/en/news/articles/2021/03/19/pr2174-samoa-imf-executive-board-completes-the-2021-article-iv-consultation-with-samoa", "overlayPath": "/en/news/articles/2021/03/19/pr2174-samoa-imf-executive-board-completes-the-2021-article-iv-consultation-with-samoa/index.md", "summary": "The Executive Board of the International Monetary Fund concluded the Article IV consultation with Samoa and considered and endorsed the staff appraisal without a meeting on a lapse-of-time basis.", "publishDate": "2021-03-19", "sections": [ { "heading": "Overview", "content": "- The Executive Board of the International Monetary Fund concluded the Article IV consultation with Samoa and considered and endorsed the staff appraisal without a meeting on a lapse-of-time basis.\n- Samoa secured its border early to protect citizens from COVID-19 and responded quickly to the 2019 measles outbreak and the global pandemic.\n- IMF support included a disbursement under the Rapid Credit Facility in April 2020, which helped unlock record budget support grants by the Asian Development Bank and the World Bank.\n- The pandemic and preceding measles outbreak pushed the 2020 September quarter real GDP to its 2014 level and produced scarring effects on sustainable development goals and wellbeing.\n- Resilient remittances and the government’s commitment to maintaining expansionary fiscal policies in the near term are expected to support a gradual recovery starting in FY2022." }, { "heading": "Executive Board assessment — outlook and risks", "content": "- The Samoan economy is projected to bottom in FY2021, with an economic recovery to follow.\n- Growth projection: FY2021 contraction of 7.8 percent; recovery to 1.7 percent in FY2022.\n- Recovery risks are tilted to the downside and include:\n - Under-execution and premature withdrawal of economic stimulus.\n - Pace of vaccination and resumption of private sector activities.\n - High vulnerability to natural disasters.\n - AML/CFT concerns that could adversely impact correspondent banking relationships and remittances.\n- Continued international capacity building and strong policy implementation are needed to turn adversity into opportunity." }, { "heading": "Fiscal policy and debt sustainability", "content": "- Fiscal stance:\n - Near term: fiscal policy needs to remain sufficiently accommodative; authorities should maintain stimulus until sustained recovery.\n - Medium term: a strong commitment to consolidation is required, through gradual withdrawal of stimulus, revenue mobilization, strengthening PFM, and sound governance.\n- Debt assessment:\n - Samoa’s debt is sustainable but at high risk of distress when considering vulnerability to natural disasters.\n - Authorities should secure adequate financing early to stimulate the economy and ensure debt sustainability.\n - The annual Unforeseen budget (reserve fund) provides some self-insurance for natural disaster losses.\n - Allocating adequate budget to forge climate resilience can provide long-term benefits." }, { "heading": "Monetary policy and financial sector", "content": "- Monetary policy is appropriately accommodative; efforts must continue to improve monetary transmission.\n- A deposit rate cap recently implemented by commercial banks should be time-bound and complemented by SOE/PFI reforms.\n- CBS, banks, and stakeholders need to address bottlenecks to credit intermediation, including implementing financial inclusion and PFI reforms.\n- Financial stability remains overall sound, but pandemic effects vary across institutions.\n- Policy priorities:\n - Monitor financial institutions and ensure compliance with prudential regulations.\n - Sequence reforms to bring non-bank financial institutions under CBS oversight without overstretching supervisory capacity.\n - Improve the balance sheet of the Development Bank of Samoa (DBS).\n - Implement the National Financial Inclusion Strategy to reduce inequality.\n - Continue implementation of the 2015 FSAP recommendations." }, { "heading": "External position and reserves", "content": "- Samoa’s external position is assessed to be moderately stronger than fundamentals and desirable policy settings, reflecting import compression, resilient remittances, and sizeable foreign grants.\n- The CBS accumulated adequate foreign exchange reserves during the period, according to the ARA metric for credit‑constrained economies.\n- Projected recovery will stimulate import demand, deteriorate the current account balance, and lower reserves over the medium term.\n- Authorities need to build reserve buffers to at least 5 months of prospective imports when considering disaster vulnerability.\n- Samoa’s pegged exchange rate system provides a nominal anchor given weak monetary policy transmission." }, { "heading": "AML/CFT and governance", "content": "- Strengthening the effectiveness of the AML/CFT framework is needed to safeguard remittances and financial stability.\n- Recommended actions:\n - Strengthen risk-based AML/CFT supervision.\n - Enhance compliance with customer due diligence and suspicious transaction reporting by banks and MTOs.\n - Implement a national digital identity to facilitate customer identification and address money laundering and corruption risks.\n - Mitigate risks from TCSP’s reliance on third party intermediaries for customer due diligence.\n - Secure resources for effective operation of the FIU.\n - Continue international engagement to address AML/CFT shortcomings and concerns raised by the EU on Samoa as a non-cooperative tax jurisdiction." }, { "heading": "Structural reforms and capacity building", "content": "- Structural reform priorities to limit scarring and support SDGs:\n - Promote agriculture, fishery, and MSMEs for economic diversification and job creation.\n - Upskill and reskill the labor force to reduce skill mismatch and increase female and youth labor force participation.\n - Realize potential benefits of PACER-Plus to support recovery.\n - Enhance climate resilience by upgrading physical infrastructure and mainstreaming climate resilience into sector plans.\n- Strengthening capacity to facilitate evidence-based policymaking:\n - Prioritize reforms to improve tax administration and PFM systems.\n - Strengthen banking sector supervision and mitigate CBR pressures.\n - Enhance statistical capacity.\n - IMF stands ready to support through capacity development." }, { "heading": "Key statistics and projections (selected exact figures)", "content": "- Real GDP growth (12-month percent change):\n - 2016/17: 1.0\n - 2017/18: -2.1\n - 2018/19: 3.6\n - 2019/20: -3.2\n - 2020/21: -7.8\n - 2021/22: 1.7\n - 2022/23: 3.0\n - 2023/24: 3.5\n - 2024/25: 2.5\n - 2025/26: 2.1\n- Consumer price index (period average):\n - 2016/17: 1.3\n - 2017/18: 3.7\n - 2018/19: 2.2\n - 2019/20: 1.5\n - 2020/21: -2.5\n - 2021/22: 2.7\n- Central government budget (in percent of GDP):\n - Revenue and grants: 2016/17: 30.7; 2017/18: 32.1; 2018/19: 35.7; 2019/20: 38.5; 2020/21: 37.0; 2021/22: 32.3; 2022/23: 33.9; 2023/24: 35.5; 2024/25: 35.9; 2025/26: 36.0\n - Of which: grants: 2019/20: 3.4; 2017/18: 6.0; 2018/19: 9.4; 2019/20: 11.2; 2020/21: 5.5; 2021/22: 5.6\n - Expenditure: 2016/17: 32.8; 2017/18: 32.9; 2018/19: 40.4; 2019/20: 39.0; 2020/21: 39.1; 2021/22: 38.2; 2022/23: 38.1; 2023/24: 38.0\n - Of which: Expense: 2016/17: 23.2; 2017/18: 24.5; 2018/19: 25.8; 2019/20: 28.8; 2020/21: 36.4; 2021/22: 32.7; 2022/23: 31.7; 2023/24: 30.5; 2024/25: 30.0; 2025/26: 29.7\n - Of which: Net acquisition of non-financial assets: 2016/17: 9.7; 2017/18: 7.6; 2018/19: 7.1; 2019/20: 4.0; 2020/21: 6.3; 2021/22: 7.4; 2022/23: 7.7; 2023/24: 8.1; 2024/25: 8.3\n - Gross operating balance: 2016/17: 7.5; 2017/18: 9.8; 2018/19: 0.6; 2019/20: -0.4; 2020/21: 5.0\n - Overall fiscal balance: 2016/17: 0.1; 2017/18: 6.2; 2018/19: -3.4; 2019/20: -6.7; 2020/21: -5.2; 2021/22: -2.7; 2022/23: -2.2; 2023/24: -2.0\n - Overall fiscal balance excl. grants: 2016/17: -5.5; 2017/18: -4.3; 2018/19: -14.6; 2019/20: -12.2; 2020/21: -10.8; 2021/22: -8.3; 2022/23: -7.9; 2023/24: -7.6\n- Broad money (M2): 2016/17: 7.8; 2017/18: 16.5; 2018/19: 9.9; 2019/20: -0.9; 2020/21: 1.8; 2021/22: 6.7; 2022/23: 4.9\n- Private sector credit, Commercial banks: 2016/17: 6.9; 2017/18: 1.6; 2018/19: 6.1; 2019/20: 5.4; 2020/21: 5.3\n- Total loan growth, Commercial banks: 6.6; 3.9\n- Total loan growth, Public financial institutions: 12.8; 17.2; 9.0\n- Private credit to GDP, Commercial banks: 48.2; 47.9; 48.1; 52.4\n- Private credit to GDP, Public financial institutions: 27.6; 29.3; 32.5\n- Total capital to risk-weighted exposures: 25.1; 27.3; 27.5\n- Non-performing loans: 4.1; 4.3\n- Balance of payments — current account balance (in millions of U.S. dollars):\n - 2016/17: -15.9\n - 2017/18: 7.2\n - 2018/19: 25.9\n - 2019/20: 9.3\n - 2020/21: -49.0\n - 2021/22: -84.6\n - 2022/23: -44.7\n - 2023/24: -25.2\n - 2024/25: -17.9\n - 2025/26: -19.1\n- Services (net): 140.6; 158.4; 179.8; 113.9; -26.4; 18.2; 62.0; 107.1; 137.7; 168.3\n- Current transfers (net): 140.0; 171.1; 181.3; 188.9; 244.0; 176.5; 186.3; 188.7; 208.3; 216.0\n- Gross official reserves (in millions of U.S. dollars): 115.0; 155.6; 185.3; 222.3; 214.7; 168.7; 164.9; 179.4; 190.1; 184.4\n- Gross official reserves (in months of next year's imports of GNFS): 3.3; 4.2; 7.0; 6.5\n- Public debt (in millions of tala): 1,047.4; 1,113.8; 1,058.6; 1,012.3; 956.1; 1,102.5; 1,215.7; 1,278.9; 1,335.3; 1,389.8\n- Public debt (in percent of GDP): 49.6; 52.8; 47.4; 46.7; 49.0; 54.1; 56.8; 56.4; 56.0; 55.6\n- External debt (in percent of GDP): 51.9; 46.8; 48.7; 53.9; 56.6; 56.3; 55.9\n- Market rate (tala/U.S. dollar, period average): 2.54; 2.52; 2.62; 2.67\n- Market rate (tala/U.S. dollar, end period): 2.51; 2.60; 2.63; 2.70\n- Nominal effective exchange rate (2010 = 100): 110.1; 106.3; 109.1; 109.3\n- Real effective exchange rate (2010 = 100): 104.3; 102.4; 105.2\n- Nominal GDP (in millions of tala): 2,110; 2,108; 2,231; 2,168; 1,952; 2,038; 2,142; 2,268; 2,386; 2,499\n- GDP per capita (U.S. dollars): 4,212; 4,198; 4,238; 3,961; 3,672; 3,764; 3,913; 4,099; 4,261; 4,407\n\nSource: IMF Executive Board press release — IMF Executive Board Completes the 2021 Article IV Consultation with Samoa (March 19, 2021).\n\n---\n\n\n References\n\n- https://www.imf.org/-/media/images/imf/bios/imfboard.jpg\n- The Executive Board\n- Samoa and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2021/03/19/pr2174-samoa-imf-executive-board-completes-the-2021-article-iv-consultation-with-samoa" } ], "bullets": [ "[Markdown version](/en/news/articles/2021/03/19/pr2174-samoa-imf-executive-board-completes-the-2021-article-iv-consultation-with-samoa/index.md)", "[Structured JSON version](/en/news/articles/2021/03/19/pr2174-samoa-imf-executive-board-completes-the-2021-article-iv-consultation-with-samoa/index.json)", "[Bundle manifest](/en/news/articles/2021/03/19/pr2174-samoa-imf-executive-board-completes-the-2021-article-iv-consultation-with-samoa/bundle-manifest.json)", "Published: March 19, 2021", "The Executive Board of the International Monetary Fund concluded the Article IV consultation with Samoa and considered and endorsed the staff appraisal without a meeting on a lapse-of-time basis.", "Samoa secured its border early to protect citizens from COVID-19 and responded quickly to the 2019 measles outbreak and the global pandemic.", "IMF support included a disbursement under the Rapid Credit Facility in April 2020, which helped unlock record budget support grants by the Asian Development Bank and the World Bank.", "The pandemic and preceding measles outbreak pushed the 2020 September quarter real GDP to its 2014 level and produced scarring effects on sustainable development goals and wellbeing.", "Resilient remittances and the government’s commitment to maintaining expansionary fiscal policies in the near term are expected to support a gradual recovery starting in FY2022.", "The Samoan economy is projected to bottom in FY2021, with an economic recovery to follow.", "Growth projection: FY2021 contraction of 7.8 percent; recovery to 1.7 percent in FY2022.", "Recovery risks are tilted to the downside and include:", "Continued international capacity building and strong policy implementation are needed to turn adversity into opportunity.", "Fiscal stance:", "Debt assessment:", "Monetary policy is appropriately accommodative; efforts must continue to improve monetary transmission.", "A deposit rate cap recently implemented by commercial banks should be time-bound and complemented by SOE/PFI reforms.", "CBS, banks, and stakeholders need to address bottlenecks to credit intermediation, including implementing financial inclusion and PFI reforms.", "Financial stability remains overall sound, but pandemic effects vary across institutions.", "Policy priorities:", "Samoa’s external position is assessed to be moderately stronger than fundamentals and desirable policy settings, reflecting import compression, resilient remittances, and sizeable foreign grants.", "The CBS accumulated adequate foreign exchange reserves during the period, according to the ARA metric for credit‑constrained economies.", "Projected recovery will stimulate import demand, deteriorate the current account balance, and lower reserves over the medium term.", "Authorities need to build reserve buffers to at least 5 months of prospective imports when considering disaster vulnerability.", "Samoa’s pegged exchange rate system provides a nominal anchor given weak monetary policy transmission.", "Strengthening the effectiveness of the AML/CFT framework is needed to safeguard remittances and financial stability.", "Recommended actions:", "Structural reform priorities to limit scarring and support SDGs:", "Strengthening capacity to facilitate evidence-based policymaking:", "Real GDP growth (12-month percent change):", "Consumer price index (period average):", "Central government budget (in percent of GDP):", "Broad money (M2): 2016/17: 7.8; 2017/18: 16.5; 2018/19: 9.9; 2019/20: -0.9; 2020/21: 1.8; 2021/22: 6.7; 2022/23: 4.9", "Private sector credit, Commercial banks: 2016/17: 6.9; 2017/18: 1.6; 2018/19: 6.1; 2019/20: 5.4; 2020/21: 5.3", "Total loan growth, Commercial banks: 6.6; 3.9", "Total loan growth, Public financial institutions: 12.8; 17.2; 9.0", "Private credit to GDP, Commercial banks: 48.2; 47.9; 48.1; 52.4", "Private credit to GDP, Public financial institutions: 27.6; 29.3; 32.5", "Total capital to risk-weighted exposures: 25.1; 27.3; 27.5", "Non-performing loans: 4.1; 4.3", "Balance of payments — current account balance (in millions of U.S. dollars):", "Services (net): 140.6; 158.4; 179.8; 113.9; -26.4; 18.2; 62.0; 107.1; 137.7; 168.3", "Current transfers (net): 140.0; 171.1; 181.3; 188.9; 244.0; 176.5; 186.3; 188.7; 208.3; 216.0", "Gross official reserves (in millions of U.S. dollars): 115.0; 155.6; 185.3; 222.3; 214.7; 168.7; 164.9; 179.4; 190.1; 184.4", "Gross official reserves (in months of next year's imports of GNFS): 3.3; 4.2; 7.0; 6.5", "Public debt (in millions of tala): 1,047.4; 1,113.8; 1,058.6; 1,012.3; 956.1; 1,102.5; 1,215.7; 1,278.9; 1,335.3; 1,389.8", "Public debt (in percent of GDP): 49.6; 52.8; 47.4; 46.7; 49.0; 54.1; 56.8; 56.4; 56.0; 55.6", "External debt (in percent of GDP): 51.9; 46.8; 48.7; 53.9; 56.6; 56.3; 55.9", "Market rate (tala/U.S. dollar, period average): 2.54; 2.52; 2.62; 2.67", "Market rate (tala/U.S. dollar, end period): 2.51; 2.60; 2.63; 2.70", "Nominal effective exchange rate (2010 = 100): 110.1; 106.3; 109.1; 109.3", "Real effective exchange rate (2010 = 100): 104.3; 102.4; 105.2", "Nominal GDP (in millions of tala): 2,110; 2,108; 2,231; 2,168; 1,952; 2,038; 2,142; 2,268; 2,386; 2,499", "GDP per capita (U.S. dollars): 4,212; 4,198; 4,238; 3,961; 3,672; 3,764; 3,913; 4,099; 4,261; 4,407", "[https://www.imf.org/-/media/images/imf/bios/imfboard.jpg](https://www.imf.org/-/media/images/imf/bios/imfboard.jpg)", "[The Executive Board](https://www.imf.org/external/np/sec/memdir/eds.aspx)", "[Samoa and the IMF](http://www.imf.org/external/country/WSM/index.htm)", "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)", "[Press Releases](https://www.imf.org/en/news/searchnews)", "[PRESS CENTER](http://presscenter.imf.org/)", "[https://www.imf.org/en/home](https://www.imf.org/en/home)" ], "alternates": { "markdown": "/en/news/articles/2021/03/19/pr2174-samoa-imf-executive-board-completes-the-2021-article-iv-consultation-with-samoa/index.md", "json": "/en/news/articles/2021/03/19/pr2174-samoa-imf-executive-board-completes-the-2021-article-iv-consultation-with-samoa/index.json", "bundleManifest": "/en/news/articles/2021/03/19/pr2174-samoa-imf-executive-board-completes-the-2021-article-iv-consultation-with-samoa/bundle-manifest.json" }, "generatedAtUtc": "2026-09-26T00:14:47.714Z" }