{
  "title": "2026 Article IV Consultation for Samoa: IMF Staff Concluding Statement",
  "publication": "IMF News, July 29, 2026",
  "sourceUrl": "https://www.imf.org/en/news/articles/2026/07/29/mcs072926-samoa-2026-article-iv-consultation",
  "canonical": "https://www.imf.org/en/news/articles/2026/07/29/mcs072926-samoa-2026-article-iv-consultation",
  "overlayPath": "/en/news/articles/2026/07/29/mcs072926-samoa-2026-article-iv-consultation/index.md",
  "summary": "Apia, Samoa - July 29, 2026: Samoa's strong post-pandemic recovery is giving way to subdued growth as weaker domestic demand is compounded by adverse external shocks.",
  "publishDate": "2026-07-29",
  "sections": [
    {
      "heading": "Recent development, outlook, and risks",
      "content": "- Samoa's strong post-pandemic recovery is giving way to subdued growth as weaker domestic demand is compounded by adverse external shocks.\n- Key constraints: higher global energy prices, climate-related risks, infrastructure gaps, a narrow production base, and outward migration.\n- Real GDP growth:\n  - FY2024/25: 4.2 percent\n  - FY2025/26 (est.): 0.4 percent\n- Drivers of the FY2025/26 slowdown:\n  - Weak household consumption and subdued private investment.\n  - Unwinding of one-off boost from 2024 CHOGM.\n  - Weak agricultural production and commerce sector activity.\n  - Rising global fuel prices and shipping costs increasing import and operating costs.\n- Inflation:\n  - Average headline inflation in FY2025/26: 1.4 percent\n  - End-period inflation in June 2026: 5.8 percent (sharp increases in fuel prices during May–June 2026)\n- External sector:\n  - Current account surplus in FY2025/26: around 4 percent of GDP, supported by strong tourism and remittance inflows.\n  - Higher fuel import costs raised imports, partly offset by weak household consumption and business activity.\n- Fiscal outcomes FY2025/26:\n  - Overall fiscal surplus: 0.7 percent of GDP\n  - Primary fiscal surplus: 1.1 percent of GDP\n  - Fiscal impulse (primary balance excluding grants) indicates fiscal policy remained expansionary in FY2025/26.\n- Near-term outlook:\n  - Growth projected to rebound to 2 percent in FY2026/27, supported by an expansionary fiscal stance.\n  - Inflation projected at 4½ percent in FY2026/27, with most increase in first half of the fiscal year.\n  - Current account projected to shift to a deficit of around 3 percent of GDP in FY2026/27, driven by higher energy import costs.\n  - International reserves expected to remain ample.\n  - Medium-term growth projected to stabilize at around 2½ percent, constrained by structural impediments.\n- 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."
    },
    {
      "heading": "Policy discussions — overarching message",
      "content": "- 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.\n- 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."
    },
    {
      "heading": "A. Fiscal policy — findings and recommendations",
      "content": "- 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.\n- Support measures:\n  - Rely on targeted assistance rather than broad-based price controls or subsidies.\n  - Maintain a high degree of fuel price pass-through while strengthening social assistance.\n  - Any additional support should be well targeted, transparent, and temporary.\n  - Generalized fuel subsidies should be avoided except as a last resort.\n  - 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.\n- Public investment and implementation:\n  - 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.\n  - Further expansion of the DDP should be contingent on demonstrable improvements in execution, transparency, and accountability.\n  - 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.\n- Fiscal framework strengthening:\n  - Near-term reforms: improve budget realism, macro-fiscal forecasting, revenue projections, fiscal reporting, and public investment management.\n  - 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.\n- Debt and climate risk:\n  - Debt dynamics broadly unchanged since the 2024 Article IV consultation.\n  - Updated debt sustainability analysis: Samoa at a moderate risk of external and overall debt distress.\n  - Most debt indicators remain below thresholds under stress tests but are sensitive to adverse shocks, particularly more frequent and severe climate-related events.\n  - Recommendations: preserve fiscal buffers, strengthen public investment and debt management, and reinforce the medium-term fiscal framework."
    },
    {
      "heading": "B. Monetary and exchange rate policies — findings and recommendations",
      "content": "- Monetary stance:\n  - CBS should maintain current monetary policy stance, with the policy rate remaining around the estimated neutral range of 2–3 percent.\n  - 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.\n- Liquidity management:\n  - Strengthen liquidity forecasting framework, expand open market operations, and consider reforming the statutory reserve deposit requirement to absorb excess liquidity.\n  - Over time, transition gradually to an interest-rate-based operational target supported by a well-defined policy corridor and standing facilities.\n- Exchange rate:\n  - The exchange rate basket peg continues to serve as the appropriate nominal anchor.\n  - Supported by ample international reserves and a strong external position, the peg anchors inflation expectations and reinforces policy credibility.\n  - Current exchange rate arrangement remains appropriate; continued prudent macroeconomic policies are essential to preserve external stability and confidence in the peg."
    },
    {
      "heading": "C. Financial sector policies — findings and recommendations",
      "content": "- Bank and PFI lending:\n  - Lending by public financial institutions (PFIs), particularly to households, has expanded rapidly.\n  - Nonperforming loans (NPLs) have risen in some segments, reflecting CBS alignment of PFI loan classification with commercial banks.\n  - CBS should closely monitor PFI lending and bank asset quality, ensure adequate provisioning, strengthen credit risk management, and enhance the supervisory framework.\n- Priorities:\n  - Develop macroprudential tools, consistently enforce prudential standards across banks and PFIs, strengthen PFI governance and oversight, and ensure PFI lending aligns with policy mandates.\n- Access to finance:\n  - Despite ample system liquidity, SMEs face financing constraints due to limited collateral, incomplete financial records, and inadequate capacity to prepare project feasibility studies.\n  - Reforms should address these bottlenecks; the planned credit information register would improve credit allocation, support financial inclusion, and strengthen resilience.\n- Central bank governance and AML/CFT:\n  - Amendments to the CBS Act should strengthen governance, transparency, and accountability while safeguarding institutional and financial autonomy.\n  - Safeguarding correspondent banking relationships (CBRs) remains essential; while CBRs are broadly stable, they are concentrated and smaller money transfer operators face pressures.\n  - 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.\n  - 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.\n- Digital assets:\n  - Any move toward digital asset initiatives should proceed with extreme caution.\n  - Given limited financial sector depth and supervisory capacity, progress should be gradual and contingent on strengthening AML/CFT frameworks, supervisory capacity, and risk management.\n  - CBS should first undertake a national digital asset risk assessment before any rollout."
    },
    {
      "heading": "D. Structural reforms — findings and recommendations",
      "content": "- Need to accelerate structural reforms to raise potential growth and strengthen resilience.\n- Constraints: remoteness, small size, reliance on tourism, vulnerability to natural disasters, weak FDI inflows, and outward migration.\n- Business environment and diversification reforms:\n  - Reduce barriers to investment and trade by improving land tenure, access to finance, trade facilitation, business regulations, and judicial and insolvency frameworks.\n  - Aim to promote diversification, boost productivity, and strengthen medium-term growth.\n- Human capital reforms:\n  - 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."
    },
    {
      "heading": "Selected economic and financial indicators (Table 1, FY2023/24–FY2030/31)",
      "content": "- Output and Inflation\n  - Real GDP:\n    - 2023/24: 4.8\n    - 2024/25: 4.2\n    - 2025/26 (Est.): 0.4\n    - 2026/27 (Proj.): 2.0\n    - 2027/28 (Proj.): 2.5\n  - Nominal GDP:\n    - 2023/24: 13.6\n    - 2024/25: 10.6\n    - 2025/26: 3.5\n    - 2026/27: 7.0\n    - 2027/28: 5.6\n    - 2028/29: 5.5\n  - Consumer price index (end of period):\n    - 2023/24: 0.8\n    - 2024/25: 1.5\n    - 2025/26: 5.8\n    - 2026/27: 3.0\n  - Consumer price index (period average):\n    - 2023/24: 3.6\n    - 2024/25: 1.8\n    - 2025/26: 1.4\n    - 2026/27: 4.5\n    - 2027/28: 3.1\n\n- Central Government Finances (percent of GDP)\n  - Revenue and grants:\n    - 2023/24: 35.6\n    - 2024/25: 31.1\n    - 2025/26: 27.0\n    - 2026/27: 31.2\n    - 2027/28: 30.7\n    - 2028/29: 29.6\n  - Of which: Tax revenue:\n    - 2023/24: 24.2\n    - 2024/25: 23.8\n    - 2025/26: 21.8\n    - 2026/27: 21.5\n    - 2027/28: 22.9\n  - Of which: Grants:\n    - 2023/24: 8.3\n    - 2024/25: 5.2\n    - 2025/26: 6.9\n    - 2026/27: 5.0\n    - 2027/28: 4.0\n  - Expenditure:\n    - 2023/24: 26.3\n    - 2024/25: 26.4\n    - 2025/26: 32.3\n    - 2026/27: 32.1\n    - 2027/28: 31.6\n    - 2028/29: 31.0\n    - 2029/30: 30.5\n  - Of which: Expense:\n    - 2023/24: 24.6\n    - 2024/25: 23.2\n    - 2025/26: 22.8\n    - 2026/27: 27.8\n    - 2027/28: 27.6\n    - 2028/29: 27.1\n    - 2029/30: 26.5\n    - 2030/31: 26.0\n  - Of which: Net acquisition of non-financial assets:\n    - 2023/24: 1.7\n    - 2024/25: 3.2\n  - Overall balance:\n    - 2023/24: 9.3\n    - 2024/25: 4.7\n    - 2025/26: 0.7\n    - 2026/27: -1.1\n    - 2027/28: -1.4\n    - 2028/29: -1.9\n    - 2029/30: -0.9\n  - Primary balance:\n    - 2023/24: 9.7\n    - 2024/25: 1.1\n    - 2025/26: -0.8\n    - 2026/27: -1.6\n    - 2027/28: -0.6\n    - 2028/29: -5.6\n  - Primary balance excluding grants:\n    - 2023/24: -0.2\n    - 2024/25: -7.8\n    - 2025/26: -6.1\n    - 2026/27: -5.6\n    - 2027/28: -5.1\n    - 2028/29: -4.6\n  - Public debt:\n    - 2023/24: 25.3\n    - 2024/25: 21.2\n    - 2025/26: 18.1\n    - 2026/27: 18.2\n    - 2027/28: 18.8\n    - 2028/29: 19.7\n    - 2029/30: 20.2\n\n- Money and Credit Aggregates\n  - Broad money (M2):\n    - 2023/24: 7.7\n    - 2024/25: 5.4\n    - 2025/26: 6.2\n    - 2026/27: 6.5\n  - Share of commercial banks in private sector credit (in percent):\n    - 2023/24: 55.4\n    - 2024/25: 54.5\n    - 2025/26: 54.1\n    - 2026/27: 53.8\n    - 2027/28: 53.4\n    - 2028/29: 53.1\n    - 2029/30: 52.7\n    - 2030/31: 52.4\n\n- Balance of Payments (percent of GDP)\n  - Current account balance:\n    - 2023/24: 4.4\n    - 2024/25: 5.7\n    - 2025/26: -2.9\n    - 2026/27: -2.2\n    - 2027/28: -2.4\n    - 2028/29: -2.3\n  - Merchandise exports, f.o.b.:\n    - 2023/24: 2.9\n    - 2024/25: 3.3\n    - 2025/26: 3.4\n  - Merchandise imports, f.o.b.:\n    - 2023/24: 37.5\n    - 2024/25: 34.4\n    - 2025/26: 34.0\n    - 2026/27: 37.6\n    - 2027/28: 37.7\n    - 2028/29: 37.8\n  - Services (net):\n    - 2023/24: 16.1\n    - 2024/25: 15.8\n    - 2025/26: 14.1\n    - 2026/27: 14.9\n    - 2027/28: 15.0\n    - 2028/29: 15.1\n    - 2029/30: 15.4\n  - Of which: Tourism receipts:\n    - 2023/24: 19.1\n    - 2024/25: 18.0\n    - 2025/26: 17.7\n    - 2026/27: 18.5\n    - 2027/28: 18.9\n    - 2028/29: 19.3\n  - Income (net):\n    - 2023/24: -1.3\n    - 2024/25: 0.0\n    - 2025/26: -3.0\n    - 2026/27: -3.1\n    - 2027/28: -3.3\n  - Current transfers (net):\n    - 2023/24: 23.9\n    - 2024/25: 21.1\n    - 2025/26: 20.3\n    - 2026/27: 20.1\n    - 2027/28: 20.0\n\n- External Reserves and Debt\n  - Gross official reserves (million U.S. dollars):\n    - 2023/24: 494.3\n    - 2024/25: 565.2\n    - 2025/26: 653.2\n    - 2026/27: 647.4\n    - 2027/28: 654.3\n    - 2028/29: 657.4\n    - 2029/30: 661.9\n    - 2030/31: 666.3\n  - Gross official reserves (in months of next year's imports):\n    - 2023/24: 10.7\n    - 2024/25: 11.6\n    - 2025/26: 11.3\n    - 2026/27: 10.8\n    - 2027/28: 10.2\n    - 2028/29: 8.8\n  - External debt (in percent of GDP):\n    - 2023/24: 23.5\n    - 2024/25: 19.8\n    - 2025/26: 16.7\n    - 2026/27: 17.0\n    - 2027/28: 18.7\n    - 2028/29: 19.4\n\n- Exchange rates and memorandum items\n  - Market rate (tala/U.S. dollar, period average):\n    - 2023/24: 2.76\n    - 2024/25: 2.78\n    - 2025/26: 2.75\n  - Real effective exchange rate:\n    - 2023/24: -1.7\n  - Memorandum items:\n    - Nominal GDP (million tala):\n      - 2023/24: 3,240\n      - 2024/25: 3,585\n      - 2025/26: 3,711\n      - 2026/27: 3,970\n      - 2027/28: 4,194\n      - 2028/29: 4,426\n      - 2029/30: 4,670\n      - 2030/31: 4,929\n    - GDP per capita (U.S. dollars):\n      - 2023/24: 5,581\n      - 2024/25: 6,075\n      - 2025/26: 6,330\n      - 2026/27: 6,614\n      - 2027/28: 6,892\n      - 2028/29: 7,236\n      - 2029/30: 7,545\n      - 2030/31: 7,866\n\nIMF staff mission visited Apia during July 15–28, 2026; staff thank the Samoan authorities for candid and constructive discussions and warm hospitality.\n\n---\n\n\n References\n\n- Samoa and the IMF\n- IMF Policy Advice -- A Factsheet\n- Mission Concluding Statements\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2026/07/29/mcs072926-samoa-2026-article-iv-consultation"
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    "Published: July 29, 2026",
    "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:",
    "Drivers of the FY2025/26 slowdown:",
    "Inflation:",
    "External sector:",
    "Fiscal outcomes FY2025/26:",
    "Near-term outlook:",
    "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 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.",
    "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:",
    "Public investment and implementation:",
    "Fiscal framework strengthening:",
    "Debt and climate risk:",
    "Monetary stance:",
    "Liquidity management:",
    "Exchange rate:",
    "Bank and PFI lending:",
    "Priorities:",
    "Access to finance:",
    "Central bank governance and AML/CFT:",
    "Digital assets:",
    "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:",
    "Human capital reforms:",
    "Output and Inflation",
    "Central Government Finances (percent of GDP)",
    "Money and Credit Aggregates",
    "Balance of Payments (percent of GDP)",
    "External Reserves and Debt",
    "Exchange rates and memorandum items",
    "[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)",
    "[Mission Concluding Statements](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)"
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