2026 Article IV Consultation for Samoa: IMF Staff Concluding Statement
IMF News, July 29, 2026
Source details
- Canonical URL
- 2026 Article IV Consultation for Samoa: IMF Staff Concluding Statement
Other formats
Bibliographic details
- Published: July 29, 2026
Recent development, outlook, and risks
- Samoa's strong post-pandemic recovery is giving way to subdued growth as weaker domestic demand is compounded by adverse external shocks.
- Key constraints: higher global energy prices, climate-related risks, infrastructure gaps, a narrow production base, and outward migration.
- Real GDP growth:
- FY2024/25: 4.2 percent
- FY2025/26 (est.): 0.4 percent
- Drivers of the FY2025/26 slowdown:
- Weak household consumption and subdued private investment.
- Unwinding of one-off boost from 2024 CHOGM.
- Weak agricultural production and commerce sector activity.
- Rising global fuel prices and shipping costs increasing import and operating costs.
- Inflation:
- Average headline inflation in FY2025/26: 1.4 percent
- End-period inflation in June 2026: 5.8 percent (sharp increases in fuel prices during May–June 2026)
- External sector:
- Current account surplus in FY2025/26: around 4 percent of GDP, supported by strong tourism and remittance inflows.
- Higher fuel import costs raised imports, partly offset by weak household consumption and business activity.
- Fiscal outcomes FY2025/26:
- Overall fiscal surplus: 0.7 percent of GDP
- Primary fiscal surplus: 1.1 percent of GDP
- Fiscal impulse (primary balance excluding grants) indicates fiscal policy remained expansionary in FY2025/26.
- Near-term outlook:
- Growth projected to rebound to 2 percent in FY2026/27, supported by an expansionary fiscal stance.
- Inflation projected at 4½ percent in FY2026/27, with most increase in first half of the fiscal year.
- Current account projected to shift to a deficit of around 3 percent of GDP in FY2026/27, driven by higher energy import costs.
- International reserves expected to remain ample.
- Medium-term growth projected to stabilize at around 2½ percent, constrained by structural impediments.
- Risks (tilted to the downside): escalating geopolitical tensions, commodity price volatility, rising trade protectionism, weaker tourism source markets, more frequent climate-related shocks, persistent inflation if demand strengthens or credit growth remains rapid, and further outward migration.
Policy discussions — overarching message
- Policy priorities: preserve macroeconomic stability via a prudent but supportive fiscal stance; remain vigilant against inflationary pressures; safeguard financial sector resilience; advance structural reforms to strengthen medium-term growth.
- Given the adverse supply-side shock, weak domestic demand, and available fiscal space, a temporary fiscal expansion is appropriate to support vulnerable households and productive investment, while preserving fiscal sustainability.
A. Fiscal policy — findings and recommendations
- Staff view: temporary expansionary fiscal stance appropriate in FY2026/27 given higher energy prices, available fiscal space, and Samoa’s strong external position; support should be targeted and temporary.
- Support measures:
- Rely on targeted assistance rather than broad-based price controls or subsidies.
- Maintain a high degree of fuel price pass-through while strengthening social assistance.
- Any additional support should be well targeted, transparent, and temporary.
- Generalized fuel subsidies should be avoided except as a last resort.
- Authorities provided one-off financial support for the Electricity Power Corporation; over time, electricity tariffs should be gradually restored to cost-recovery levels through a transparent pricing mechanism.
- Public investment and implementation:
- Public investment can strengthen growth and resilience, but persistent under-execution of capital spending—notably under the District Development Program (DDP)—requires improved project appraisal, procurement, implementation, and monitoring.
- Further expansion of the DDP should be contingent on demonstrable improvements in execution, transparency, and accountability.
- Initiatives with potential fiscal risks, including public enterprise-related projects, should proceed only after robust credit risk assessments, transparent financing arrangements, and clear safeguards to contain contingent liabilities.
- Fiscal framework strengthening:
- Near-term reforms: improve budget realism, macro-fiscal forecasting, revenue projections, fiscal reporting, and public investment management.
- Medium-term: publish calibration of fiscal anchors, provide clearer ex ante guidance for budget preparation and execution, specify well-defined escape clauses and credible paths for returning to fiscal anchors following shocks.
- Debt and climate risk:
- Debt dynamics broadly unchanged since the 2024 Article IV consultation.
- Updated debt sustainability analysis: Samoa at a moderate risk of external and overall debt distress.
- Most debt indicators remain below thresholds under stress tests but are sensitive to adverse shocks, particularly more frequent and severe climate-related events.
- Recommendations: preserve fiscal buffers, strengthen public investment and debt management, and reinforce the medium-term fiscal framework.
B. Monetary and exchange rate policies — findings and recommendations
- Monetary stance:
- CBS should maintain current monetary policy stance, with the policy rate remaining around the estimated neutral range of 2–3 percent.
- Remain vigilant to second-round effects from higher fuel prices and ready to tighten policy if inflation expectations de-anchor, particularly under adverse commodity price scenarios.
- Liquidity management:
- Strengthen liquidity forecasting framework, expand open market operations, and consider reforming the statutory reserve deposit requirement to absorb excess liquidity.
- Over time, transition gradually to an interest-rate-based operational target supported by a well-defined policy corridor and standing facilities.
- Exchange rate:
- The exchange rate basket peg continues to serve as the appropriate nominal anchor.
- Supported by ample international reserves and a strong external position, the peg anchors inflation expectations and reinforces policy credibility.
- Current exchange rate arrangement remains appropriate; continued prudent macroeconomic policies are essential to preserve external stability and confidence in the peg.
C. Financial sector policies — findings and recommendations
- Bank and PFI lending:
- Lending by public financial institutions (PFIs), particularly to households, has expanded rapidly.
- Nonperforming loans (NPLs) have risen in some segments, reflecting CBS alignment of PFI loan classification with commercial banks.
- CBS should closely monitor PFI lending and bank asset quality, ensure adequate provisioning, strengthen credit risk management, and enhance the supervisory framework.
- Priorities:
- Develop macroprudential tools, consistently enforce prudential standards across banks and PFIs, strengthen PFI governance and oversight, and ensure PFI lending aligns with policy mandates.
- Access to finance:
- Despite ample system liquidity, SMEs face financing constraints due to limited collateral, incomplete financial records, and inadequate capacity to prepare project feasibility studies.
- Reforms should address these bottlenecks; the planned credit information register would improve credit allocation, support financial inclusion, and strengthen resilience.
- Central bank governance and AML/CFT:
- Amendments to the CBS Act should strengthen governance, transparency, and accountability while safeguarding institutional and financial autonomy.
- Safeguarding correspondent banking relationships (CBRs) remains essential; while CBRs are broadly stable, they are concentrated and smaller money transfer operators face pressures.
- Staff welcome progress including removal from the EU list of non-cooperative tax jurisdictions and ongoing efforts to strengthen the AML/CFT framework ahead of the 2027 Mutual Evaluation, including planned amendments to the Money Laundering Prevention Act.
- Continue strengthening AML/CFT framework, beneficial ownership transparency, risk-based supervision, e-KYC, and the national digital ID system to support secure remittance channels and preserve external financial links.
- Digital assets:
- Any move toward digital asset initiatives should proceed with extreme caution.
- Given limited financial sector depth and supervisory capacity, progress should be gradual and contingent on strengthening AML/CFT frameworks, supervisory capacity, and risk management.
- CBS should first undertake a national digital asset risk assessment before any rollout.
D. Structural reforms — findings and recommendations
- Need to accelerate structural reforms to raise potential growth and strengthen resilience.
- Constraints: remoteness, small size, reliance on tourism, vulnerability to natural disasters, weak FDI inflows, and outward migration.
- Business environment and diversification reforms:
- Reduce barriers to investment and trade by improving land tenure, access to finance, trade facilitation, business regulations, and judicial and insolvency frameworks.
- Aim to promote diversification, boost productivity, and strengthen medium-term growth.
- Human capital reforms:
- Expand technical and vocational education, upskilling and reskilling, job matching services, childcare support, and measures to raise labor force participation to address labor shortages and reduce skills mismatches and informality.
Selected economic and financial indicators (Table 1, FY2023/24–FY2030/31)
- Output and Inflation
- Real GDP:
- 2023/24: 4.8
- 2024/25: 4.2
- 2025/26 (Est.): 0.4
- 2026/27 (Proj.): 2.0
- 2027/28 (Proj.): 2.5
- Nominal GDP:
- 2023/24: 13.6
- 2024/25: 10.6
- 2025/26: 3.5
- 2026/27: 7.0
- 2027/28: 5.6
- 2028/29: 5.5
- Consumer price index (end of period):
- 2023/24: 0.8
- 2024/25: 1.5
- 2025/26: 5.8
- 2026/27: 3.0
- Consumer price index (period average):
- 2023/24: 3.6
- 2024/25: 1.8
- 2025/26: 1.4
- 2026/27: 4.5
- 2027/28: 3.1
- Central Government Finances (percent of GDP)
- Revenue and grants:
- 2023/24: 35.6
- 2024/25: 31.1
- 2025/26: 27.0
- 2026/27: 31.2
- 2027/28: 30.7
- 2028/29: 29.6
- Of which: Tax revenue:
- 2023/24: 24.2
- 2024/25: 23.8
- 2025/26: 21.8
- 2026/27: 21.5
- 2027/28: 22.9
- Of which: Grants:
- 2023/24: 8.3
- 2024/25: 5.2
- 2025/26: 6.9
- 2026/27: 5.0
- 2027/28: 4.0
- Expenditure:
- 2023/24: 26.3
- 2024/25: 26.4
- 2025/26: 32.3
- 2026/27: 32.1
- 2027/28: 31.6
- 2028/29: 31.0
- 2029/30: 30.5
- Of which: Expense:
- 2023/24: 24.6
- 2024/25: 23.2
- 2025/26: 22.8
- 2026/27: 27.8
- 2027/28: 27.6
- 2028/29: 27.1
- 2029/30: 26.5
- 2030/31: 26.0
- Of which: Net acquisition of non-financial assets:
- 2023/24: 1.7
- 2024/25: 3.2
- Overall balance:
- 2023/24: 9.3
- 2024/25: 4.7
- 2025/26: 0.7
- 2026/27: -1.1
- 2027/28: -1.4
- 2028/29: -1.9
- 2029/30: -0.9
- Primary balance:
- 2023/24: 9.7
- 2024/25: 1.1
- 2025/26: -0.8
- 2026/27: -1.6
- 2027/28: -0.6
- 2028/29: -5.6
- Primary balance excluding grants:
- 2023/24: -0.2
- 2024/25: -7.8
- 2025/26: -6.1
- 2026/27: -5.6
- 2027/28: -5.1
- 2028/29: -4.6
- Public debt:
- 2023/24: 25.3
- 2024/25: 21.2
- 2025/26: 18.1
- 2026/27: 18.2
- 2027/28: 18.8
- 2028/29: 19.7
- 2029/30: 20.2
- Money and Credit Aggregates
- Broad money (M2):
- 2023/24: 7.7
- 2024/25: 5.4
- 2025/26: 6.2
- 2026/27: 6.5
- Share of commercial banks in private sector credit (in percent):
- 2023/24: 55.4
- 2024/25: 54.5
- 2025/26: 54.1
- 2026/27: 53.8
- 2027/28: 53.4
- 2028/29: 53.1
- 2029/30: 52.7
- 2030/31: 52.4
- Balance of Payments (percent of GDP)
- Current account balance:
- 2023/24: 4.4
- 2024/25: 5.7
- 2025/26: -2.9
- 2026/27: -2.2
- 2027/28: -2.4
- 2028/29: -2.3
- Merchandise exports, f.o.b.:
- 2023/24: 2.9
- 2024/25: 3.3
- 2025/26: 3.4
- Merchandise imports, f.o.b.:
- 2023/24: 37.5
- 2024/25: 34.4
- 2025/26: 34.0
- 2026/27: 37.6
- 2027/28: 37.7
- 2028/29: 37.8
- Services (net):
- 2023/24: 16.1
- 2024/25: 15.8
- 2025/26: 14.1
- 2026/27: 14.9
- 2027/28: 15.0
- 2028/29: 15.1
- 2029/30: 15.4
- Of which: Tourism receipts:
- 2023/24: 19.1
- 2024/25: 18.0
- 2025/26: 17.7
- 2026/27: 18.5
- 2027/28: 18.9
- 2028/29: 19.3
- Income (net):
- 2023/24: -1.3
- 2024/25: 0.0
- 2025/26: -3.0
- 2026/27: -3.1
- 2027/28: -3.3
- Current transfers (net):
- 2023/24: 23.9
- 2024/25: 21.1
- 2025/26: 20.3
- 2026/27: 20.1
- 2027/28: 20.0
- External Reserves and Debt
- Gross official reserves (million U.S. dollars):
- 2023/24: 494.3
- 2024/25: 565.2
- 2025/26: 653.2
- 2026/27: 647.4
- 2027/28: 654.3
- 2028/29: 657.4
- 2029/30: 661.9
- 2030/31: 666.3
- Gross official reserves (in months of next year's imports):
- 2023/24: 10.7
- 2024/25: 11.6
- 2025/26: 11.3
- 2026/27: 10.8
- 2027/28: 10.2
- 2028/29: 8.8
- External debt (in percent of GDP):
- 2023/24: 23.5
- 2024/25: 19.8
- 2025/26: 16.7
- 2026/27: 17.0
- 2027/28: 18.7
- 2028/29: 19.4
- Exchange rates and memorandum items
- Market rate (tala/U.S. dollar, period average):
- 2023/24: 2.76
- 2024/25: 2.78
- 2025/26: 2.75
- Real effective exchange rate:
- 2023/24: -1.7
- Memorandum items:
- Nominal GDP (million tala):
- 2023/24: 3,240
- 2024/25: 3,585
- 2025/26: 3,711
- 2026/27: 3,970
- 2027/28: 4,194
- 2028/29: 4,426
- 2029/30: 4,670
- 2030/31: 4,929
- GDP per capita (U.S. dollars):
- 2023/24: 5,581
- 2024/25: 6,075
- 2025/26: 6,330
- 2026/27: 6,614
- 2027/28: 6,892
- 2028/29: 7,236
- 2029/30: 7,545
- 2030/31: 7,866
IMF staff mission visited Apia during July 15–28, 2026; staff thank the Samoan authorities for candid and constructive discussions and warm hospitality.