IMF Staff Country Reports

The 2024 Article IV Consultation discusses that Samoa’s economic recovery has been remarkable. An expansionary fiscal stance will support the economy, while fiscal reforms can improve the effectiveness of policy and mitigate risks. The focus in the near term should be overcoming capacity constraints to execute much needed public investment, including climate-related projects. Monetary policy normalization should continue, with an aim to guide interest rates higher. Financial sector risks have declined relative to the pandemic but require continued monitoring. Priorities for the banking system include operationalizing the emergency liquidity assistance framework and enhancing prudential standards. The exchange rate peg remains the appropriate nominal anchor. Overcoming significant structural challenges which impede the medium-term growth potential will require concerted reform efforts. Key priorities include attracting foreign investment, reducing trade facilitation costs, and mitigating the impact of the pickup in the seasonal workers program, including by enhancing human capital and raising labor force participation rates.