Measles shrinks economy
Samoa’s measles-stricken economy shrank in the final quarter of last year as the nation’s economic output fell for the first time in more than a year and by 3.7 per cent.
The Gross Domestic Product (G.D.P.) figures, released by the Samoa Bureau of Statics on Monday, show the economy breaking a streak of uninterrupted growth since the June quarter last year.
The nation's aggregate economic output amounted to some $498.9 million in real terms for the 2019 December quarter.
At a decline of 3.7 per cent from the same quarter the year prior, the results represents the lowest quarterly figure achieved in the last six consecutive quarters
The decline in G.D.P. was expected due to the quarter coinciding with the measles epidemic that led to the nation losing 83 lives and the Government declaring a state of emergency that brought all commerce in the nation to a halt for two days.
The decrease in G.D.P. represents a precipitous drop from the growth of 5.2 per cent during the September quarter, a surge that economists had attributed to the increased economic activity associated with the Pacific Games.
"G.D.P. dropped significantly in the December 2019 quarter reflecting the negative impact of the measles epidemic which affected normal business operations, travel, employment and other services which are usually in high demand at the end of the year," the report reads.
"The decrease was mainly influenced by the unfavorable performance by commerce, communication, business services, food and beverages manufacturing, transport, fishing, electricity and water and accommodation and restaurants."
The commerce sector in particular registered a major drop of more than 23 per cent, followed next by a decline in communications activity by 12 per cent.
Positive growth in the construction sector (10.7 per cent) and financial services (3.7 per cent) was not enough to offset the overall decline in economic activity.
When measured in current, or nominal, prices (which are not adjusted for the effects of inflation) the December 2019 quarter’s decrease amounted to 4.4 per cent.
At current prices the nation’s G.D.P for the quarter was $544.6 million tala. That compares to $569.7 million for the December 2018 quarter.
The nation’s economic output was mostly driven by commerce, which accounted for 30.4 per cent of the nation’s G.D.P. in nominal terms in the relevant quarter. Financial services were the second most significant contributor at 9.9 per cent.
The national G.D.P. per capita for the 2019 calendar year was $11,138 per person, equating to growth of 4.9 per cent.
In nominal terms, the G.D.P. for the 2019 calendar year was about $2.23 billion an increase from $2.15 billion the year prior, or an increase of 2.9 per cent.
The release of the figure by the S.B.S. follow the release last week of a private advisory note by the A.N.Z.
The bank which found that without dramatic economic intervention such as a stimulus package equivalent to up to 10 per cent of the national G.D.P. Samoa was facing an annual economic downturn of up to 18 per cent.
Fiji announced an economic stimulus package of US$400 million on Friday.