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Samoa’s Economy Sees Modest Growth as Inflation Remains Low

Wellington, NZ - Samoa’s economy has experienced modest growth in recent years, driven by an increase in remittances and tourism receipts.

Economic Growth

According to the Central Bank of Samoa (CBS), real GDP growth was estimated at 2.5% in 2014, with real GDP per capita growing at a rate of 1.3%. This growth has been driven by:

  • Remittances: Remittances from Samoan emigrants living abroad have played a significant role in boosting the economy, accounting for around 20% of the country’s GDP.
  • Tourism: Tourism has also been a key driver of growth, with visitors drawn to Samoa’s natural beauty and cultural heritage.

Challenges

Despite these positive trends, the country still faces challenges related to financial inclusion. Low-income households are unable to participate in economic growth due to limited access to formal financial services.

Government Initiatives

The government has recognized this issue and has made efforts to address it through initiatives such as:

  • Strategy for the Development of Samoa (SDS) 2012-16: This strategy prioritizes access to financial services as a means to achieve inclusive growth.
  • Financial Inclusion Targets: The SDS has set targets for increasing financial inclusion, including:
    • Increasing the number of bank accounts held by low-income households
    • Reducing the cost of financial transactions

Public Finance Management Reforms

In addition to these initiatives, the government has also implemented reforms aimed at improving public finance management and enhancing the link between sector planning and budgeting. The medium-term expenditure and investment framework is expected to provide a more strategic approach to resource allocation and project implementation.

Conclusion

While Samoa’s economy faces challenges related to financial inclusion, the country is making progress towards achieving its development goals. With continued efforts to promote financial inclusion and improve public finance management, Samoa is well-positioned for sustained economic growth and development in the years ahead.