Economy to contract, Minister of Finance says
Following a high of 3.5 per cent growth for the 2018-19, the economy is expected to contract by 3.3 per cent in the Financial Year to June, or well below previous forecasts.
The forecast was revealed by the Minister of Finance, Sili Epa Tuioti, in his first reading speech for the budget on Tuesday.
"For Samoa alone, it is anticipated that the economy will contract by -3.3 [per cent] in the current 2019-20 fiscal year,” the Minister said.
But the downward revision comes after a 3 per cent growth rate had been predicted for Samoa's current fiscal year by the International Monetary Fund, amounting to a decline of 6.6 per cent relative to expectations.
"Their projections were based on their assessment of the well-developed mix of macroeconomic policies implemented for the development of the economy," Sili said.
"The review’s recommendation also supported the Government of Samoa’s continuation of many of its development works to ensure that the economy continues to grow in light of the uncertain global economic conditions.
"This assessment following a period when Samoa’s economy was struggling in the aftermaths of the many challenges it faced is an achievement in itself and is evidence that Samoa’s economy has the ability to quickly recover.
"It is without a doubt that at this point, we do not know how long it will take for a cure to be developed by those nations with the resources to do so.
Last week the Prime Minister, Tuilaepa Dr. Sailele Malielegaoi, spoke on the importance of continuing the Government's development projects even throughout the coronavirus-led economic downturn.
"Right now with my Cabinet and Government, we are focusing on continuing the development projects. This is another method to continue providing jobs," Tuilaepa said.
"As you can see overseas, with millions without jobs already, this is why the Government is pushing through with its projects to keep businesses moving, especially those included in the projects of the Government.
"It gives our children jobs, especially those who have just been born, tomorrow and the day after. The country continues to bear children and this is God's gift and so the Government plans ahead for them."
Amongst the Government's ongoing development projects are the new Vaisigano Bridge, the improvement works of the West Coast road and the new Office of the Electoral Commission.
Last month the Governor of the nation’s Central Bank, Maiava Atalina Ainuu-Enari, predicted the country’s gross domestic product (G.D.P.) will fall by -6.6 per cent by the end of the annual year in response to international border closures resulting from the global pandemic COVID-19.
She also said the bank is predicting some economic bounce back in 2021, forecasting total output to initially fall by a lesser -1.7 per cent, before ending the calendar year in positive territory of 1.1 per cent.