1. Gross Domestic Product (GDP)
Nominal GDP
Quarter (September 2020 quarter)
$491.80 million, 15.5% lower than $581.87 million in the September 2019 quarter.
Annual (12 months to end September 2020)
$2,077.94 million or 8.3% lower than $2,266.31 million for the year up to September 2019.
GDP per capita (12 months to September 2020)
$10,283 per capita, 9.0% lower than $11,305 for the same period up to September 2019.
Real GDP
Quarter (September 2020 quarter)
$446.94 million, 16.3% lower than $533.96 million in September 2019 quarter.
Annual (12 months to end September 2020)
$1,895.34 million, 8.6% lower than $2,073.53 million for the year up to September 2019.
2. Inflation (January 2021)
• Annual average headline Consumer Price Index (CPI) recorded a negative inflation (or deflation) rate of -2.4% in January 2021, down from 1.48% at end June 2020 and 1.52% at end January 2020.
• The decline was underpinned by a drop in imported inflation to -3.9% (from 1.0% in June 2020).
• Local inflation also declined to -0.9% from 2% at end June 2020.
3. Agricultural produce (First 7 months to January 2021)
• According to Samoa Bureau of Statistics (SBS) monthly survey, the average volume of agricultural produce supplied to the local markets dropped by 14.6% in the first 7 months of 2020/21, over the same period last year.
• The drop reflected large reductions in supplies of stable food crops such as banana, ta’amu, yam breadfruit and coconuts; as well as vegetables.
• Given the weak demand, the average price index of agricultural produce sold at the local markets also dropped by 9.1%.
4. Banking system (January 2021)
• Banking system at end January 2021 was well capitalized with the capital adequacy ratio hovering at 28.5%, similar to that of January 2020, but well above the 15% minimum prudential requirement.
• Its liquidity was more than adequate at 25.7%, which was lower than 23.9% in January last year, and also well above its minimum prudential requirement of 10%
• Non-performing loans (NPLs) as at end January 2021 stood at 3.8% to total loans, about the same level as at end December 2020.
• The provisioning for doubtful loans to total NPLs rose to 176.5% from 167.4% in December 2020.
5. Balance of Payment
External Trade:
I. Total Export if Goods (First 7 months to January 2021)
$55.61 million; 32.1% lower than $81.90 million, in the first 7 months to January 2020.
Export Composition
The shares of the main exports were as follow:
Re-exports – 28% ($15.55 million)
Domestically produced exports – 72% ($40.06 million)
Of which;
Fresh Fish – 50.7% ($20.31 million)
Taro – 13.9% ($5.57 million)
Crude coconut oil – 11.3% (4.52 million)
Beer – 8.8% ($3.54 million)
Cigarettes – 3.2% ($1.26 million)
Nonu juice – 1.9% ($0.76 million)
Others – 10.2% ($4.1 million)
II. Total Imports of Goods (First 7 months to January 2021)
$475.37 million, 14.1% lower than $533.42 million in same period up to January 2020
• Government imports dropped by 43.1% to $24.29 million.
• Petroleum imports dropped by 38.6% to $55.82 million (reduced fuel demand)
• Non-petroleum private sector imports edged down by 5.8% to $395.25 million.
III. Net Trade of Goods Deficit (First 7 months to January 2021)
$419.76 million, 11% lower than $471.52 million in the 7 months to January 2020
IV. Visitor Arrivals & Receipts (First 7 months to January 2021)
Total Arrivals
0 visitors, 100% lower than 113,182 visitors in the 7 months to January 2020
Total receipts
$0 million, 100% lower than $341.76 million in the 7 months to January 2020
V. Private Remittances (First 7 months to January 2021)
$362.88 million, 9.5% higher than $327.78 million in the first 7 months of FY2019/20
VI. Gross Official Foreign Reserves
• $754.05 million at end January 2021, 54.1% (or $137.87 million surplus in first 7 months of 2020/21); significantly higher than the same period last year.
• At this level, this was sufficient to cover 11.7 months of imports, which was significantly higher than 6.6 months at end January 2020.
6. External Debt Outstanding (at end September 2020)
I. Debt Stock
$1,027.7 million (around 49.5% of nominal GDP), 1.2% lower than $1,040.2 million at end September 2019 (45.9% of nominal GDP)
II. Annual Debt Servicing (at end September 2020)
$65.71 million, which was 12.4% lower than $74.98 million in the year up to September 2019. This was equivalent to
• 9.85% of recurrent revenue;
• 8.71% of foreign reserves; or
• 12.05% of total exports of goods and services.
A. ISSUES AND CHALLENGES
• The latest update on GDP for September 2020 quarter showed a decline in the annual Real GDP growth, down to -8.6% from -3.2% growth at end June 2020. The further decline of the economy is a result of the combined adverse impacts of the Measles Outbreak in November-December 2019 and the global COVID-19 pandemic. Lockdown of international borders, travel restrictions and containment measures were implemented to protect Samoa from the pandemic. Thereby, these measures adversely affected Samoa’s local economy. The economy is now in recession with 4 consecutive quarters of negative growths since December 2019 with possibility of the economy moving into a depression. By March 2021, it marks one year without international tourism meaning the economy has normalized at a lower level of real GDP without tourism.
• Inflationary expectations dropped in the short term with the current weak domestic demand as well as the significant drop in global fuel prices given the impacts of the pandemic. Moreover, risks of natural disasters and climatic changes are constant threats to price stability, especially from the agriculture production prices.
• The banking system at end January 2021 appears to have been well-capitalized as shown by its’ capital adequacy ratio of 28.5%. Also, NPLs of the banking system remains low. However, because of the absence of international tourism due to the effects of COVID-19, this becomes a major challenge on the banking system. Therefore, the banking system needs to work together with its clients and the relevant stakeholders to minimize any potential adverse impacts of defaults on the economy.
• Gross official foreign reserves are at an all-time high of $754.05 million at end January 2021, or around 11.7 months of import cover, which is above the Central Bank minimum benchmark of 4.0 months of imports. The high level of official reserves reflect the influx of government’s inflows of financial assistance for COVID-19 assistance and major projects. However, with the uncertainty of the effects of the pandemic, there are many factors that could shrink foreign reserves onwards if not managed properly. Hence why the Central Bank continues to monitor and manage the international foreign reserves.
B. RECOMMENDATIONS
1. Samoan domestic economy needs to be prepared as we are facing challenging times ahead. A fiscal policy should be implemented and Monetary policy should remain accommodative to support economic recovery in the near term and sustainable economic growth over the medium term.
