## 2026 Article IV Consultation for Samoa: IMF Staff Concluding Statement

_IMF News, July 29, 2026_

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## 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.*

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## References

- [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)

_Source: https://www.imf.org/en/news/articles/2026/07/29/mcs072926-samoa-2026-article-iv-consultation_