Economic downturn forecast

By Soli Wilson 13 March 2020, 5:00PM

Despite a rosy start to the Financial Year, Samoa's economic output is expected have contracted 1.1 per cent in the final quarter of last year once figures are crunched, Central Bank data shows. 

Central Bank data released this week shows that for the first seven months - July to January - of the 2019-2020 Financial Year Samoa's economy has enjoyed some rosy numbers. 

But that good news is forecast to come to an abrupt halt as the economy is massively affected by the current slowdown linked to the measles epidemic and coronavirus hits the nation's total economic output is forecast to dip by 1.1 per cent.

The Central Bank of Samoa released a report stating the annual Real Gross Domestic Product (G.D.P.) grew by 4.4 percent for the September quarter of September 2019 compared to the same period last year. 

The percentage growth gets higher when G.D.P. is compared on annual basis, to $2,255.98 million from $2,115.08 million accounting for the 6.7 per cent growth for the 12 months ending September 2018.

G.D.P. per capita stood at $11,254, in the year leading up to September 2019 has also recorded an increase of almost six per cent from the same period up to September 2018.

Total export of goods from Samoa from July 2019 to January 2020 were equivalent to $84.73 million, or an increase of 5.3 per cent higher than the $80.49 million, in the first seven month to January 2019. 

In the same period, total imports of goods grew by 2.3 per cent higher from the previous year, or from $540.71 million to $553.42 million in definite figures.

"Government imports jumped up by 17.7 percent to $42.73 million, Non-petroleum private sector went up by 4.8 percent to $419.81 million, Petroleum decreased by 12.5 percent to $90.88 million," the statement reads.

Total receipts amounted to $349.97 million which were said to be 2.1 per cent higher than in January 2019, while remittances similarly grew by 4.1 per cent higher than said period.

Despite the increases in Samoa's economy numbers, the statement said a Samoa Bureau of Statistics (S.B.S.) survey showed that the volume of agricultural produce supplied to local markets fell by 7.7 percent in the seven months to January 2020, leading to an increase in average relative prices by 7.1 per cent.

This overall reduction was due to lower supplies of ta'amū and breadfurit while the bulk of the decline was recorded for vegetables (particularly head cabbage, tomatoes, cucumber and pumpkin). 

As Samoa heads into the last few months of the current Financial Year more bad news is expected. 

"However, the economy is expected to be adversely affected by the current slowdown in economic activities due to the measles crisis, with early estimates pointing to a 1.1 percent (of total annual GDP) reduction in economic production in the fourth quarter of 2019," the statement reads.

"The adverse impact has come from lower monthly tourist arrivals recorded for December 2019 and January 2020, where the bulk of reductions to the trend were mainly from ‘Visiting Families and Friends (V.F.R.)” from New Zealand and Australia when compared to both December 2018 and January 2019 respectively."

Earlier this month, Samoa Observer reported on economists’ warnings that as Samoan tourism had been hit by a major new year downturn as visitor numbers drop nearly one-quarter which is said to be a decline almost certain to send the economy into shock.

The same sentiments were reflected by Central Bank's release stating that Samoa's economy will be facing challenging times, especially the tourism industry and its ancillary services.

"Visitor arrivals in the seven months to January 2020 declined slightly by 0.6 percent to 113,485 visitors over the same time last year. However, total visitor earnings edged up by 2.1 percent to $329.97 million in the corresponding period."

Weather in the early months of the year also presented major challenges to the economy, the Bank said, causing flight disruptions to travelers in and out of Samoa and adverse impacts on agricultural production.


By Soli Wilson 13 March 2020, 5:00PM

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